Credit report

Settled Medical Debt Comes Out of Credit Reports: How to Check Yours

miodrag ignjatovic | E+ | Getty Images

If the medical debt you’ve already paid persists on your credit report, you may want to see if that has changed.

Starting Friday, the first phase of changes to when this debt will appear on credit reports will go into effect. Specifically, the big three credit reporting companies — Equifax, Experian and TransUnion — will no longer include medical debt after it’s paid off. According to past practice, it could stay on your file for seven years.

Additionally, consumers now have one year, instead of six months, before unpaid medical debt appears on credit reports once it is escalated to a collection agency. And more changes are coming: In the first half of 2023, the credit bureaus will stop including all outstanding debts under $500.

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Collectively, the changes “should have the effect of improving the credit scores of millions of Americans,” said Jeff Smedsrud, co-founder of HealthCare.com.

Medical debt can hurt your credit score

About $88 billion in medical debt appeared on consumer credit reports in June 2021, according to the Consumer Financial Protection Bureau. Additionally, 58% of bills in collections and appearing on credit reports were medical-related, and approximately 43 million credit reports showed such collections.

This can lower your score, making it harder to get loans or other credit, or get good interest rates if you’re approved.

“A little debt of $25…can really have a negative impact on a credit score — just the report of it,” said Leslie Tayne, founder of Tayne Law Group and attorney specializing in debt relief and settlement. consumer debt.

“It could make the difference between being able to borrow [from a lender] and not being able to borrow,” Tayne said.

Credit agencies say their new policies will eliminate about 70% of medical debt from credit reports.

Nevertheless, consumers may want to confirm that their paid medical debt no longer appears, according to US PIRG, an advocacy group.

How to check your credit report

You can get a free copy of your report from every Equifax, Experian and TransUnion at annualcreditreport.com. Until the end of 2022, you can get free weekly reports through this site instead of the usual once a year.

Look specifically for medical debts you’ve already paid in full, advises US PIRG.[That’sthedebtthatoughttodisappearunderthenewrulesCheckthesectionwherethereport”flags”newdebtaswellasthe”accountinformation”or”collections”sectionofthereport[C’estladettequidevraitdisparaîtreaveclesnouvellesrèglesVérifiezlasectionoùlerapport«signale»lanouvelledetteainsiquelasection«informationssurlecompte»ou«recouvrements»durapport[That’sthedebtthatoughttodisappearunderthenewrulesCheckthesectionwherethereport”flags”newdebtaswellasthe”accountinformation”or”collections”sectionofthereport

If you see a debt you’ve already repaid (or any other error), you can dispute it directly with the credit reporting company whose report contains the error. Each of the reports may contain different information, so it is worth checking all three.

Federal law requires credit bureaus to investigate disputes within 30 days (with some exceptions) and notify you within five days of the completion of the investigation.

If your dispute is denied or the error is not removed from your report, you can file a complaint with the Consumer Financial Protection Bureau, notes US PIRG.

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