The big three big credit bureaus – Equifax, Experian, and TransUnion – have changed the way they treat medical debt. It’s a change that should help millions of Americans.
Until now, when unpaid medical bills were sent to collection that information showed up in the patient’s credit file. And it stayed there for years after the bills were paid, reducing that person’s access to credit.
As of July 1, Equifax, Experian, and TransUnion will stop reporting medical debt that has been repaid.
Consumer advocate Patricia Kelmar at the non-profit U.S. PIRG calls this change a big deal.
“Before this, even after consumers paid off all their medical debt, it could live on as a ding or negative mark on their credit reports for up to seven years,” Kelmar said. “That’s a long time to be suffering from bad credit when you’ve already paid off your bills.”
The big three credit bureaus have also decided that unpaid medical debt will not show up in credit files for 12 months, rather than the current six months. This gives patients more time to deal with medical providers and insurance companies when there are billing issues.
Starting in mid-2023, medical debt of less than $500 will not be included in Equifax, Experian, or TransUnion credit files.
More Info:
Good News for Consumers: Credit Bureaus Agree to Change How They Report Medical Debt
(Listen: This story includes my interview with Patricia Kelmar from U.S. PIRG).
