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The New Credit Score Rule That Will Affect Millions Of Americans With Medical Collections

Many American families were struggling financially due to the high cost of healthcare. Unpaid medical bills can affect credit scores even if they are small.

Equifax, Experian, and TransUnion will remove cleared medical debt from credit reports beginning July 1, 2022.

Despite having paid a delinquent medical debt, a person's credit score may be negatively affected. Currently, Americans have nearly $88 billion dollars of medical debt that can damage their credit scores, which is set to change with the upcoming act.

It is recommended that debtors clear all their medical debt before July 1 in order to benefit from this change. As a result, their credit will no longer be affected by this past debt. 

Consumers are still responsible for their medical debts

Additionally, this does not mean you are forgiven if you have medical collections. The bureaus are required to remove medical collections from your report if you have already paid them but they are still negatively reporting on your report.

Bureaus have assumed responsibility for deleting or suppressing medical debt accounts that have been reported as paid or are in the process of being reported as paid.

Additional changes

Further, credit reports will no longer list medical collection debt under $500 in early 2023. It is very common for copays of $50-$100 not to be paid, which negatively impacts people's credit scores.

In addition, beginning July 1, bureaus are no longer permitted to report medical debt collection accounts until they have been 365 days past their original creditor's date of first delinquency (DOFD).

ACAinternational, "First Wave of Medical Debt Credit Reporting Changes Starts July 1", Accessed on June 28th, 2022, https://www.acainternational.org/news/first-wave-of-medical-debt-credit-reporting-changes-starts-july-1/

Trevor Smith, "Cleared medical debt to stop lowering credit score starting July 1st", ABC4, Accessed June 28, 2022, https://www.abc4.com/news/digital-exclusives/cleared-medical-debt-to-stop-lowering-credit-score-starting-july-1st

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