If you have medical debt weighing down your credit score, it may be wiped off your credit report in a few months.
Yet before you cheer the good news, first make sure your debt qualifies.
The three credit reporting companies — Equifax, Experian and TransUnion — recently announced that starting July 1, they will remove any medical debts that were sent to debt collectors and eventually paid off.
In addition, any unpaid medical debt won’t appear on credit reports for a year, up from the previous 6 months, in order to give consumers time with providers and insurers to address the bill.
In the first half of 2023, the credit reporting firms also won’t include medical collection debt under at least $500 on credit reports.
“You can have an otherwise pristine credit score and this medical debt can bring you down,” said Ted Rossman, senior industry analyst at Bankrate and CreditCards.com.
“Sometimes it is a simple insurance mix up, or it can be a life or death crisis.”
If medical debt that has gone to collections is the only blemish on your report, once it comes off, your score could increase by about 100 points, Rossman predicts. The impact will be lower for someone who has other missteps, he said.
