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Good News About Medical Debt And Credit Reports


Paying down debt feels great, but it is discouraging when, after you make the last payment on your payment plan from your emergency room visit, your application for a car loan still gets denied?  Most debts stay on your credit report for seven years, even if you were just a little bit late paying them off.  The three major credit reporting agencies, namely Equifax, Experian, and TransUnion, have changed their policies, so that, beginning on July 1, 2022, most medical debts will no longer appear on your credit report.  This is great news, especially since, due to the No Surprises Act, an even greater number of medical bills will be exempt from credit reporting.  Unfortunately, though, the biggest and most unpayable medical bills will still be able to damage your credit score.  The new credit reporting policies are a good start, but if you are still struggling with medical debt, contact a Jupiter credit reporting lawyer.

New Rules Extend Grace Period Before Debts Appear on Your Credit Report

Starting this July, there will be a one-year grace period before medical bills appear on credit reports, whereas the current grace period is only six months.  The more you can pay down your medical bills in the first year, the better, especially since, if the balance is less than $500 by the end of the year, the debt will not show up on your credit report.

Debts Under $500 Will No Longer Appear on Credit Reports

Not only will the newest medical debts not appear on credit reports, the smallest debts also will not.  Only medical debts greater than $500 will appear.  This is especially encouraging since the recently enacted No Surprises Act will reduce the amounts patients must pay for emergency services when the doctors who provide those services are out-of-network.  If an ER doctor sent you a bill for $1000 in 2008, you would only get a bill for about $250 if the visit happened in 2022, and that bill would not appear on your credit report.

Debts Will Disappear From Your Credit Report as Soon as You Paid Them Off

The cruelest thing about credit reports is the way they keep reminding you about debts you once incurred, even if you eventually paid those debts off.  This will change with the new credit reporting rules.  Beginning this summer, medical debts will be removed from your credit report as soon as you pay the final installment.  Therefore, paying off your debts will improve your credit score more quickly than it did before.

These new changes make credit repair more attainable, but the fact remains that healthcare is expensive.  You may need to consolidate your debts or negotiate with creditors to settle them for a lower amount.

Contact a South Florida Credit Repair Lawyer About Medical Bankruptcy

A South Florida credit repair lawyer can help you find a way out of medical debt and improve your credit score and creditworthiness.  Contact Nowack & Olson, PLLC in Boca Raton, Florida to discuss your case.



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