Medical Debt May No Longer Hurt Your Credit Score
This is big, really BIG! Effective July, 1, paid medical debts will be removed from credit reports so they won’t hurt your chances of obtaining a job, securing housing, or gaining access to loans. Additionally, the time before medical debts appear on your credit reports will increase from 6 months to a year. This gives you more ability to work with insurance and healthcare providers to address medical debts before they negatively impact you. And, there’s even more good news! In the first half of 2023, unpaid medical debts less than $500 will no longer appear on credit reports.
Ultimately billions—with a B—of dollars of medical debts will be erased from consumer records as a result of the recent changes! These debts have had major financial consequences for individuals across generations and from all walks of life. Tremendous sacrifices are often required in attempt to reduce medical debts. It's all too common for consumers, especially members of Gen Z and Millennials, to skip rent or mortgage payments because of their debt. Moreover, studies show that medical debts can lead to further health issues, such as stress and high blood pressure, resulting in even more medical debt. It's a ferocious cycle! It's no wonder that medical debts are the most common source of collection-related blackmarks on credit reports.