Medical debt on your consumer credit report


LOUISVILLE, Ky. (WAVE) – There isn’t much good news when it comes to the family’s bank accounts today.

Millions of Americans are struggling with medical bills, but there’s a little help now when it comes to trying to make ends meet.

According to Census Bureau data, up to 45% of Americans could benefit from a change in medical debt reporting. Most Americans can’t pay for medical care up front, and the burden is even greater when that medical bill is unexpected.

The way medical debt is reported has changed, and we want to make sure you’re aware of it.

“The way medical debt is reported on your credit report is going to change,” said Nick VinZant, principal research analyst and insurance expert at QuoteWizard. “That can be huge for people.”

The three national credit reporting agencies Equifax, Experian and TransUnion have announced major changes in the management of your outstanding medical debt. Overdue payments of any kind have always persisted on credit reports for up to seven years. Even after the overdue invoice has been paid.

“In the past, even if you paid a medical bill or really any kind of bill that would stay on your credit report,” VinZant proclaimed.

Now, paid medical debts that were in collection will no longer remain on your consumer credit report.

“As soon as you pay it, it goes off your credit report,” exclaimed VinZant.

You will also have more time before the unpaid medical debt is reported. More time will give you a chance to get your finances in order so you can pay off the debt or wipe it out altogether.

“Previously, after 6 months, any medical debt would be flagged on your credit report and it would affect your credit score,” VinZant said. “Now it’s been a year.”

Medical debts under $500 will not appear on your account at all.

“So far what they’ve said is that it won’t show up on your credit report if it’s under $500,” VinZant explained. “It should start in 2023.”

Overdue payments on your credit report can affect almost everything you do and want.

“Your credit score dictates a lot of how you pay for things,” exclaimed VinZant. “Car insurance, cell phones, mortgage applications, rental applications.”

One in 10 Americans who owe medical debt always make sure the calculated amount is correct.

“Make sure your medical bills are accurate,” VinZant stressed. “It is estimated that up to 80% of medical bills have a defect and include charges that they should not have. Take a look at your insurance plan and really understand what the advantages are over other plans available to you. A health savings account is one of the most important things you can do, because it’s tax-free money you’ve contributed.

This doesn’t mean you can ignore your medical debt. Pay it as soon as you can.

Check your credit report to make sure any outstanding medical debt you’ve paid is immediately removed from your report.

Even though the rule has changed and medical debt must be removed immediately, mistakes still happen.

Either way, you should check your credit report for errors.


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