Medical bills are one of the most common forms of debt in the US. According to a 2021 survey by HealthCare.com, 30% of all American adults have some amount of medical debt. More than half of those with debt carried a balance of $1000 or more, and 7% had a balance of more than $10,000.
This debt is a serious burden, and in most cases, it’s unavoidable. While health insurance has become more accessible in the past decade, many people remain underinsured because they can’t afford higher premiums, leaving them facing thousands of dollars in deductibles and copays if they have an emergency. Even people with quality health insurance can face staggering bills if they develop a severe or chronic condition requiring specialty care.
If health problems aren’t enough, the debt can have an ongoing impact on your finances. This debt shows up on your credit report just like consumer debts, car loans, and other forms of credit. If you’re one of the nearly one in three US adults with outstanding medical bills, they can impact your credit report and make applying for loans or housing more challenging. If your healthcare debts have been sent to collections, those black marks will last for years after you’ve paid off the bill in full.
There is good news, though. The three main US credit bureaus have agreed to start removing specific types of medical debt from credit reports since these bills have little to do with the actual creditworthiness of the individual.
As of July 1st, 2022, TransUnion, Equifax, and Experian will remove all mention of medical bills that have been paid in full, regardless of whether they were sent to collections. Furthermore, they won’t report medical bills that have been sent to collections until they have remained there for one year, doubling the previous six-month limit. Furthermore, starting in early 2023, these bureaus will not report any healthcare bills in collections that are under $500 at all.
These changes are a serious boon to anyone who has or had medical bills that they simply could not pay. While the solution isn’t perfect, hospital stays and unexpected copays will no longer be quite so stressful for many Americans.
However, medical debt will still impact your credit if you’re not careful. If so, you may be able to get those marks removed as well. Below, we break down the ways healthcare debts can wind up on your credit report and what you can do to get them removed.
How Medical Debt May Still Impact Your Credit
In most cases, healthcare debt only shows up on your report if it goes to collections. As long as you have an agreement with your insurance or healthcare provider to pay off the debt, it won’t appear on your record. This is because medical bills aren’t a loan or line of credit. Even if you have a payment plan that involves interest, it won’t affect your score as long as you remain in good standing.
However, the changes made this year still leave ways that healthcare bills can wind up on your credit report. If you have a healthcare bill of more than $500 in collections for more than a year, it will show up on your account and stay there until it’s paid in full. While this is more lenient than any other kind of debt, it can still impact the rest of your financial life.
How to Remove Medical Bills From Your Credit Report
What if healthcare debt appears on your report when it shouldn’t? In that case, you may have to take action. Creditors and credit bureaus alike can make mistakes and aren’t likely to spot and correct them unless you point them out.
- Request a free copy of your credit report. You have the right to know what’s on your report. All three agencies must give you one free copy of your report annually through the website AnnualCreditReport.com. Check to see what’s listed and determine if it should be there. Examples of medical debt credit errors include listing collections accounts that have since been paid in full or have only been in collections for a few months.
- Gather evidence. Once you’ve identified errors that you want to get fixed, you should collect documentation proving that the entry is a mistake. This may include bills and notices, insurance statements, copies of bank statements or checks that show you’ve paid, and anything else that might prove your record is incorrect.
- File a dispute. With this information in hand, you can file a dispute with the bureaus that include the inaccurate entry. They will investigate your claim and inspect the evidence you provide to determine if the entry should be removed. In many case, the entry will disappear after they determine that a mistake was made.
Occasionally, the bureaus may refuse to remove inaccurate information, or it may return to your report. In that case, you may need to take legal action to have your report fixed. An experienced credit error attorney can help you ensure medical debts don’t impact your creditworthiness unnecessarily.
Stop Letting Unavoidable Medical Debt Affect Your Finances
You didn’t ask for thousands of dollars in medical debt. While credit bureaus are removing some kinds of debt from consumer reports, they can still make mistakes. It’s your responsibility to take action if your report is inaccurate and request that the incorrect entries be removed. If you’re struggling to have medical bills removed from your report, you can get help. At the Law Offices of Todd M. Friedman, APC, our experienced attorneys will help you stand up to the bureaus and get your report fixed. Schedule your consultation today to learn how we will fight against credit errors on your behalf.