This month (July 2022), major credit reporting agencies started eliminating paid-off medical debt from people’s credit reports. Additionally, it will take a year for new medical bills that individuals accrue and fail to pay promptly to appear on their credit records. Currently, outstanding medical debt becomes visible six months later.

About 20 percent of persons have medical debt reported to credit bureaus as collection activity. But, according to Chi Chi Wu at the National Consumer Law Center, once that occurs, it typically remains there for years.

According to her, many people are unaware that paying off a debt collector doesn’t remove the item from your credit record. But now, after it’s paid off, medical debt will disappear.

Vivian Ho, a professor at Rice University, said: “This is fantastic news for those customers who are trying to take out loans either to purchase a car, maybe buy a house.” This debt was the cause of many people’s misery, according to the speaker.

Beginning in 2023, credit reports will no longer contain information on unpaid medical debts less than $500.

Marcadis Singer, PA
5104 South Westshore Blvd.,
Tampa, Florida.
Phone: (813) 288-1881

 

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