Leading Credit Reporting Companies Eliminate 70% of Medical Debt
Equifax, Experian and Trans-Union will begin the process of permanently removing 70% of medical debt from credit reports starting June 31.
ARKANSAS, USA – If you have medical debt, listen up because starting Friday, July 1, the majority of past medical debt will be removed from consumer credit reports. Equifax, TransUnion and Experian will begin the process of permanently removing 70% of medical debt from credit reports.
“This means that if someone had a medical debt in collection but paid it off, the negative remarks will actually be removed from the reports, which will no longer impact creditworthiness,” Leslie Tayne said.
Finance expert and lawyer Leslie Tayne says consumers will now have up to a year to pay or arrange to pay their medical debts before the debt is flagged in credit bureau reports. It was previously only 6 months before it happened.
“Now, with the changes in the rules, this means that the consumer will not only have the opportunity to have some time to overcome the challenges of overdue medical debt, but certain debts under $500 will not be flagged and will then have an impact on their credit,” she said.
She says reporting anything negative on your credit report could lower your credit score by more than 100 points, taking your credit score from good to fair.
“Medical debt, even if small and not as large as a home loan or even credit card debt, could have a significant impact on the credit score and therefore the consumer’s ability to borrow and borrow at better rates. Interest rates are going up now, so being able to qualify for the best rate right now is very important,” she said.
A few tips to try and avoid getting reported to creditors in the first place, make sure all medical providers have your correct address, so you actually get the bills. Also, find out beforehand what your insurance covers to avoid surprises when you receive the invoice.
“Medical bills can be very confusing and it is common for medical debt to go unreported on credit reports. So be sure to check your credit report to see if the credit report is actually accurate with this medical billing information,” she said.
Finance experts suggest people check their credit reports. Anyone can get a free credit report every year. They say there are also credit monitoring websites you can sign up for.
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