Medical Debt May Stop Hurting Your Credit Score

Medical debt is a huge problem for many Americans. Not only that, its a problem that usually can’t be avoided. When you take into the account the lack of transperancy in pricing, the lack of options, and the one-sided leverage, it makes sense that medical debt should be excluded from credit scores. It doesn’t show the real choices of the consumer.

There may be a little good news coming. The credit reporting agencies may stop including medical debt in their credit score calculation. As reported by CNBC:

If you have looming medical debts on your credit report, there’s relief on the way. The three largest credit bureaus, TransUnion, Equifax and Experian are removing cleared medical debts from consumers credit reports beginning in July. This means that if you’ve paid your medical bill in full and the debt is still sitting on your credit report as a negative mark, this negative mark will now be removed.

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The recent announcement from the credit bureaus is a great sign for consumers who have paid their medical debts back, but are still suffering from negative marks on their credit score. However, for those still dealing with overdue debts, there are resources available for you to tackle a stressful financial situation.

CNET adds:

Equifax, Experian and Transunion — the three major credit bureaus — said they soon plan to remove nearly 70% of medical collection debt from consumer credit reports. Starting July 1, paid medical collections debt will be removed from credit reports. In addition, the credit agencies will give consumers a year to address any outstanding balances before it becomes part of their credit file. In the first half of 2023, the credit bureaus plan to remove and no longer report medical collections debt under $500.