On July 1, paid medical collections will disappear from Equifax, Experian and TransUnion credit reports. Previously, these could have remained for up to seven years.
Also, unpaid medical collections will not appear on credit reports unless they’ve been in collections for at least a year (up from six months currently). And beginning next year, medical debts under $500 will no longer appear on credit reports.
The Consumer Financial Protection Bureau says that 43 million Americans have about $88 billion worth of medical debts on their credit reports. The agency adds that medical debt accounts for 58% of bills in collections.
Many people with otherwise sparkling credit records are dragged down by medical debt. Having a debt in collections could easily trim 100 points off a strong credit score. That may not have been fair, says CFPB Director Rohit Chopra.
It’s being treated differently by the credit bureaus, but you’re still responsible for paying debt off (assuming the debt’s statute of limitations has not expired).
The new ways of assessing medical debt should lift tens of millions of Americans’ credit scores. It’s always a good idea to check your credit reports regularly to make sure everything is accurate. Especially if you have one of the types of medical debt that should disappear on July 1, make a note to check your credit reports on or shortly after that date.
For more information or questions regarding your credit, please feel free to call us at 281-631-5461.