ARKANSAS, USA — If you have medical debt, listen up because starting Friday, July 1, the majority of past medical debt will be removed from consumers’ credit reports. Equifax, TransUnion and Experian will begin the process of permanently removing 70% of medical debt from credit reports.
“That means if someone had medical debt in collections but paid it off, the negative remarks will actually get deleted from the reports, no longer impacting the credit standing,” said Leslie Tayne.
Finance expert and attorney, Leslie Tayne says consumers will also now have up to a year to pay or arrange to pay medical debts before the debt gets reported on credit bureau reports. It was previously just 6 months before that happened.
“Now with the changes in the rules, that means the consumer will have the ability not only to have some time to work through the challenges of delinquent medical debt but that certain debts under 500 dollars won’t be reported and then impacting their credit,” she said.
She says the reporting of anything negative on your credit report could drop your credit score by over 100 points taking your credit score from good to fair.
“The medical debt, even though it’s small and not as large as say a home loan or even credit card debt, could severely impact the credit score and therefore the consumer's ability to borrow and borrow at better rates. Interest rates are going up now, so being able to qualify for the best rate right now is super important,” she said.
Some advice to try and avoid being reported to creditors in the first place, make sure all medical providers have your correct address, so you are actually getting the bills. Also, find out what your insurance covers before to avoid surprises when you get the bill.
“Medical bills can be very confusing and it’s common that medical debt is miss reported on credit reports. So be sure to check your credit report to see whether the credit report is actually accurate with that medical billing information,” she said.
Finance experts suggest people check their credit reports. Everyone can get a free credit report every year. They say there are also credit monitoring websites you can sign up for.
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