Personal Credit and Medical Debt Reporting
It should come as no surprise that more debt collectors approach customers over medical bills than any other kind of debt.1. After all, it may be quite challenging to negotiate the complicated world of medical billing and collection procedures. Many people require assistance with deciphering the meaning of the many billing codes included on medical bills.
Due to their ignorance of their debt or ongoing legal battles with their healthcare provider, this has in the past resulted in patients accruing unpaid medical bills. Credit reports were adversely affected by the frequent reporting of these delinquent items to credit agencies.
Thankfully, there have been modifications made to the way medical debt appears on credit reports. The three national credit reporting agencies (Equifax, Experian, and TransUnion) will stop reporting medical debt that has been paid after it has been assigned to collections on July 1, 2022.
Additionally, medical debt that is in collections now takes a year instead of six months to show up on credit reports, according to credit reporting firms. The purpose of this extra time is to provide customers the opportunity to resolve any disputed bills or arrange a payment schedule with their healthcare providers.
Lastly, medical debt in collections of less than $500 will no longer be shown on credit reports by the credit reporting firms as of April 11, 2023. About half of the people who have medical debt included on their credit reports are expected to have it erased with this final step.
There are things you can do to ensure that unpaid medical expenses aren’t hurting your credit if you have any. Check your credit report first. You may get a free copy of it at AnnualCreditReport.com from each of the three main consumer reporting firms once a week.
Make sure that any medical bill that is under $500, less than a year old, or that has been paid off is removed from your credit record as soon as you get your credit report. You have the right to contest any errors, including those related to medical bills, by getting in touch with the business that supplied the inaccurate information as well as the credit reporting agency. Additionally, you can use consumerfinance.gov to submit a complaint to the Consumer Financial Protection Bureau.