I have a relative who didn't have health insurance for many years (can you relate?). Due to issues with diverticulitis, he ended up in the emergency room a couple of times. The bills from the emergency room were costly. What could he do? He paid $50/month to the hospital to avoid being sent to collections. With so many uninsured individuals unable to pay their medical bills, I imagine the hospital was satisfied to receive consistent payments against the debt vs. not being paid. Are you plagued with medical debt?
When faced with unexpected medical bills, many consumers have collection debt on their credit reports. Medical debt on your credit report can drastically decrease your credit score. A low credit score makes it harder to buy a home with reasonable interest rates, if at all. You'll be excited to learn that medical debt will soon be cleared from credit reports.
If you've paid your medical bill in full and the debt is still listed as a negative note on your credit record, it will be deleted.
TransUnion, Equifax, and Experian, the three largest credit bureaus, are making changes to your credit reports' medical collection debt. Medical collection debt that has been paid in full will no longer be included on consumer credit reports beginning 7/1/22.
Experian said nearly 70% of medical debt will be removed from credit reports.
In addition, you'll now have more time to settle medical debt before it appears on your credit report. Instead of having merely 6 months to work with collections to pay off debt before it appears on your credit report, you will soon have 1 year.
Beginning the first half of 2023, if medical debt collections account totals are $500 or less, they will no longer be included on consumer credit reports.
Medical debt collections of $500 or less will no longer be reported on your credit report.
Disputing medical collections: Go directly to the company that furnished the information, often the debt collector. Get everything in writing so you have a paper trail. Best to document your medical collections by sending dispute letters via certified mail and asking for an email follow-up to a phone conversation.
Conclusion
If you have medical collection debt on your credit reports, credit bureaus are set to improve your financial wellbeing with changes that go into effect on July 1, 2022. Thanks to changes by the credit bureaus, medical collection debt totaling $500 or less will no longer be reported on your credit report, and you'll have more time to settle debt before it appears on your credit report. Less debt on your credit report will result in a higher credit score, making it easier to qualify for a home loan. Be sure to check your credit score after the changes go into effect in July.
