Did you know that just over half of all the debt that appears on credit reports is related to medical expenses? The most recent data is from a 2014 report by the Federal Consumer Protection Bureau, and it says that 43 million people have medical debt in collections and it’s hurting their credit score.
Lenders use credit reports and credit scores to evaluate the risk that someone won't repay a loan. The credit reporting agencies are now going to differentiate between medical and non-medical debt. Medical debt will receive a smaller penalty, than non-medical debt.
Starting September 15, the three major credit reporting agencies will set 180-day waiting period before including medical debt on a consumer's credit report. The six-month period is intended to ensure there's enough time to resolve disputes with insurers and delays in payment. In addition,
the credit bureaus will remove medical debt from consumers' credit reports once it's paid by an insurer. Hopefully this move will help those dealing with medical debt.
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