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Most Medical Debts To Be Removed From Credit Reports - YouTube
Channel: NBC News
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if you've got medical debt it might be
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going away the wall street journal
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breaking the story that the three major
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credit reporting firms equifax experian
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and transunion are making sweeping
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changes to how they report medical debt
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and collections beginning this summer
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the journal's consumer lending reporter
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anna maria andreadis is here now uh anna
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maria thank you for being with us so
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you're reporting these changes will
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remove nearly 70 percent of medical debt
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from credit reports that is serious i
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mean this is death that can stick around
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for up to seven years even after the
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collection agencies are paid off uh tell
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us more here what is the plan to try to
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give consumers as close to a clean slate
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as possible
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this is a big change essentially what
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we're talking about is the removal of uh
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tens of billions of dollars of medical
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debt that's in collections and it falls
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into two buckets so the first changes
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will roll out in july when the three
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largest credit reporting firms in the
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u.s equifax experian and transunion will
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change how they handle
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medical debt that's in collections that
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consumers have paid so basically you
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have unpaid bills from a hospital or
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another medical provider they're sent to
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a collections firm and then you end up
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actually paying those bills well the way
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that things currently work right now in
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the credit reporting system
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that account in collection still remains
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on your credit report for up to seven
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years this change would remove these
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medical debts from the credit reports
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there will also be
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there will also be changes to unpaid
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medical debts um for example next year
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at some point during the first half of
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next year the credit reporting firms are
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going to remove unpaid medical debts of
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less than 500
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that threshold could rise as some of the
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details and plans um here are still
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getting ironed out
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there will also be a delay that um
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credit reporting firms will give
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consumers specifically
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people will have up to one year from
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when their unpaid medical debts go into
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collections to pay it to try to sort it
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out
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essentially giving themselves more time
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before it ends up on the credit report i
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mean we're talking about so much money
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here medical debt is a huge burden for a
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lot of americans
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look at the numbers an estimated 88
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billion dollars in medical bills are on
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43 million credit reports according to
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the consumer financial protection bureau
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walk us through what changes for these
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people if that kind of debt goes away i
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mean what are what does it prevent them
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from doing and what might it open up for
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people who may have had this on their
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credit reports the medical debt on
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credit reports is a huge burden for many
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americans in the same way that credit
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reports include whether we pay our
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credit cards or on time our auto loans
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our mortgages on time they include this
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information and it's a negative mark
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essentially what it's telling a lender
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when a consumer goes to apply for new
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credit is that this person has an
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account in collections that can
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basically influence the lender to deny
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the consumer for credit um to charge
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them more in interest than they
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otherwise would the removal of these
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negative accounts would essentially make
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it easier for people to get approved for
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credit or to get approved for credit at
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better terms
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the three firms released a joint
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statement saying these changes are
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another step we're taking together to
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help people across the united states
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focus on their financial and personal
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well-being as an industry we remain
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committed to helping drive fair and
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affordable access to credit for all
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consumers they're also trying to appease
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the consumer financial protection bureau
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according to people familiar with the
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matter tell us more about that side of
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this
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so uh the cfpb under its current
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director rohit chopra has taken a really
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hard line against the credit reporting
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firms it's made the credit reporting
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industry a priority and specifically
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what it's been focused on is errors on
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people's credit reports and how far do
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credit reporting firms go when trying to
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fix errors that are pointed out to them
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by consumers earlier in march the cfpb
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said that it planned to hold credit
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reporting firms accountable for not
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taking enough action against companies
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that report erroneous medical debts so
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medical debts and the errors associated
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with them of people's credit reports are
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a piece of the scrutiny from the cfpb
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which is currently investigating all
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three credit reporting firms equifax
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experian and transunion with regards to
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how they handle consumer disputes
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pertaining to errors that people find on
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their credit reports tell the credit
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reporting firms about and try to get
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removed from those files annamarie these
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are huge changes let's hope it helps a
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lot of people who have been struggling
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to borrow money or struggling to just
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get this debt off their credit reports
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uh thanks so much for sharing your
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reporting with us
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thank you
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thanks for watching our youtube channel
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follow today's top stories and breaking
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news by downloading the nbc news app
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you
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