Can Medical Collection Debt Impact Credit Scores?
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- Changes to medical collection debt included on credit reports begin to take effect July 1, 2022.
- Paid medical collections debt will no longer appear on credit reports, and the time period before unpaid medical collection debt appears increases from 6 months to 1 year.
- There are some actions to consider that may help prevent debt from medical bills.
The three nationwide credit reporting agencies (NCRAs) — Equifax®, Experian® and TransUnion® — announced significant changes to medical collection debt reporting to support consumers faced with unexpected medical bills. As of July 1, 2022, paid medical collection debt will no longer appear on credit reports. And the time period before unpaid medical collection debt appears on your credit reports increases from 6 months to 1 year. This extension provides additional time to pay off medical debt before it appears on credit reports. In the first half of 2023, the NCRAs will no longer include medical collections debt under $500 on credit reports.
Before this joint measure, if a healthcare provider turned your overdue account over to a collection agency because you haven't paid the amount due, the collection agency may report that information to the credit agencies after a 180-day (six-month) period.
By removing paid medical collection debt from credit reports, this joint action from the credit agencies helps support consumers faced with unexpected medical bills. Most healthcare providers do not report to the three nationwide credit bureaus (Equifax, Experian and TransUnion), which means most medical debt is not typically included on credit reports and does not generally factor into credit scores.
When you receive your bill, be sure to examine it carefully and compare it with the explanation of benefits provided by your health insurance provider. If you believe you've found an error, contact your medical provider or health insurance company. Ask for an itemized bill so you can better understand what you're being charged for.
It's always a good idea to regularly review your credit reports to make sure the information is accurate and complete. You can receive free Equifax credit reports with a myEquifax account. Free weekly credit reports from the three NCRAs are available at annualcreditreport.com through the end of 2022.
If you're facing mounting medical expenses, there are some things you may want to consider to help prevent accumulating debt from medical bills.
- Contact your health insurance company. Know your coverage and follow up to make sure the company is paying costs it has agreed to cover.
- Negotiate with your health provider. If you can't afford to pay a bill, try to work with your medical provider to reduce the amount owed or set up a payment plan.
- If you believe medical debt has been listed on your credit report mistakenly, contact the medical provider or collection agency first. You can also file a dispute with the three nationwide credit bureaus. At Equifax, you can create a myEquifax account to file a dispute. Visit the dispute page to learn other ways you can submit a dispute on your Equifax credit report.
- If possible, prepare for medical procedures in advance by finding out what your insurance will cover and what costs are your responsibility.