TAMPA, Fla. — Earlier this month, the three major credit bureaus: TransUnion, Equifax, and Experian, released ajoint statement saying they’ve removed medical debt under $500 from consumer credit reports.
"Our industry plays an important role in the financial lives of consumers. We understand that medical debt is generally not taken on voluntarily, and we are committed to continuously evolving credit reporting to support greater and responsible access to credit and mainstream financial services," said Mark W. Begor, CEO Equifax; Brian Cassin, CEO Experian; and Chris Cartwright, CEO TransUnion.
Financial experts believe this change will be important for consumers and their credit scores going forward and help people qualify for better terms and conditions when looking for loans.
“Some of these debts under $500 were just tanking credit scores and with the changes and the removal of debts for medical debts under $500, it does give consumers a boost in their credit scoring models,” said Leslie Tayne, Founder and Managing Director of Tayne Law Group, financial attorney and expert in credit and debt.
This comes after the Biden Administration announced plans last year for medical debt reform.
Over the past year, credit bureaus have vowed to make other changes, too.
“The time frame for medical debt to appear on credit reports has changed. It was 180 days; it has increased to one year so that means you have, as a consumer, more time to work out a payment plan and resolve open medical debt-related issues before it actually gets reported,” said Tayne.
If you have medical debt that exceeds $500, creed and debt experts have a few suggestions to start getting ahead.
- Work out a payment plan.
- Get organized by writing down everything you owe. Do this in a way that works best for you, whether that’s on paper, in a spreadsheet, or on an app.
- Regularly check your credit reports.
"Yearly, you’re entitled to a free credit report. Check that. Make sure the reporting is accurate. If it’s not accurate, contact the servicer or the provider of the medical debt or you could also contact the credit reporting bureaus directly,” said Tayne.
“Understand what kinds of debt can and is reported on your credit report and how it will impact you,” she added.
