{"id":2878,"date":"2022-07-28T09:07:15","date_gmt":"2022-07-28T13:07:15","guid":{"rendered":"https:\/\/www.consumerslaw.com\/blog\/?p=2878"},"modified":"2022-07-28T09:07:15","modified_gmt":"2022-07-28T13:07:15","slug":"medical-debt-three-important-changes-to-your-credit-reports","status":"publish","type":"post","link":"https:\/\/www.consumerslaw.com\/blog\/medical-debt-three-important-changes-to-your-credit-reports\/","title":{"rendered":"Medical Debt –Three Important Changes to your Credit Reports"},"content":{"rendered":"

\"\"The three main national credit bureaus — Trans Union, Equifax, and Experian — have agreed to make changes in the reporting of medical debt. As of July 1, 2022, settled medical debt that would normally remain on credit reports for up to 7 1\/2 years should come off the report. As a result, consumers may see an increase in their credit score, a benefit which can open doors to borrowing at more favorable rates for housing, loans and credit cards.<\/p>\n

Three Important Changes to Credit Reporting<\/h3>\n

Change #1<\/strong><\/span>: As soon as a medical debt is paid, it will be removed from the consumer’s credit reports. This means if you\u2019ve paid your medical bill in full and the debt still appears on your credit report as a negative mark, the tradeline and any late pay history on the credit report, will be removed.<\/p>\n

Change #2<\/strong><\/span>: The period to report unpaid medical debt will increase from six\u00a0months to one year. This will give people a chance to pay the medical debt off, work with a health insurance carrier, or dispute it before credit problems arise.<\/p>\n

Change #3<\/span>:<\/strong>\u00a0 In the first half of 2023, all medical collection debt with an initial reported balance of less than $500 will be removed from credit reports.\u00a0 This will result in nearly 75% of medical debt to disappear from consumer credit reports.<\/p>\n

Medical Debt is usually unforeseen<\/strong><\/h3>\n

\"\"Let\u2019s face it.\u00a0 Most medical debt is incurred unexpectedly. Patients visit doctors or seek medical treatment because they are sick or have had an injury. Due to the high cost of healthcare, many Americans have difficulty paying expensive medical bills to hospitals, physicians, labs and other medical providers.<\/p>\n

Collectors must follow the law<\/strong><\/h3>\n

\"\"Unfortunately, unpaid medical debt may be forwarded to a collection agency or law firm collector.\u00a0 Once in collection, negative tradelines appear on credit reports and credit scores may drop. Consumers then begin to feel the effects of a negative credit rating.<\/p>\n

 <\/p>\n

Common impact of a negative credit rating<\/strong>
\n-Credit term changes, i.e. credit limits lowered, or interest rates increased
\n-Loan applications denials
\n-Landlords application denials
\n-Job offers or promotions retracted<\/p>\n

Federal Laws Protecting Consumer’s Rights<\/strong><\/h3>\n

The following consumer protection laws provide protections for consumers from inaccurate information appearing on credit reports and abusive collection practices by debt collectors.<\/p>\n

Fair Credit Reporting Act<\/strong><\/p>\n

The Fair Credit Reporting Act<\/a><\/strong><\/span> governs how consumer credit information can be used and distributed.\u00a0 It gives the consumer rights to view credit reports and dispute inaccurate information.\u00a0 Consumers should obtain current copies<\/strong><\/span><\/a> of their credit reports from Transunion, Experian and Equifax at least every year.\u00a0 When information is listed incorrectly, the consumer must take steps to dispute the errors<\/a><\/span><\/strong>.\u00a0 The credit bureaus are required to investigate disputes and fix or delete inaccurate information within 30 days of a consumer dispute. If they don\u2019t, they may have broken the law.<\/p>\n

Fair Debt Collection Practices Act<\/strong><\/p>\n

The Fair Debt Collection Practices Act<\/a><\/strong><\/span> is a federal law that provides legal protections for consumers from a collector\u2019s abusive collection tactics.\u00a0 Common violations to this law include:<\/p>\n