As of July 1st, 2022 all medical debts that have been paid, whether the debt was held by a physician or a collection agency, must be suppressed from a consumer’s credit report!
This was announced by all three CEO’s of Equifax, Experian and TransUnion in April of 2022. Now before we start patting these CEO’s on the back, keep in mind, they only made these changes to stay off a bill that was going before Congress for a vote and actually make it legislation about this very subject. (Medical Debt Relief Act of 2021)
What ever caused this to happen, it certainly is in the best interest of the consumer. The reason the Consumer Financial Protection Bureau (CFPB) kept pushing for this to happen is, quite frankly, most major medical debts are unforeseen. Nobody expects to get injured in an auto accident. Nobody expects their children to become injured or critically ill. Things happen in life! And to have your credit worthiness and purchasing power diminished for this, is and has been, very unfair to the overall picture of a consumer’s ability to pay back a loan.
I recently spoke to two Loan Officers at PrimeLending, one of the biggest loan originators in the Midwest, about the impact these changes have made for their client’s and the ability to get them a home loan. Both Brian Conaty and Trisha Hengler had very similar responses about this subject. They were very candid that they have not noticed any “paid” collections on their client’s credit reports since last July. And (one of the reasons for this blog) they state that most of their client’s were unaware of the changes to medical debt reporting. Lastly, one thing we all agree on, is they are absolutely happy with the Bureau’s decision because it’s just flat out good for the consumer.
Here are 3 key points to the April 2022 announcement by the Bureaus.
- As stated above, as of July 2022 all paid collections will now be suppressed from a consumer’s credit report. And from what we’ve witnessed, this has held out to be true. However, it’s important to keep an eye on your credit report and make sure there are no medical collections reporting incorrectly. Remember, these must be paid. If you don’t have a credit monitoring service, I highly recommend you do.
- Starting sometime in the first half of 2023, any medical debt below $500 will be suppressed and kept off a consumer’s credit report. Even more of a reason to have and maintain a credit monitoring service.
- Lastly, sometime in the first half of 2023, the time frame for a collection to even be reported has been increased from 6 months to 12 months. This will give the consumer more time to figure out charges with their Medical Insurance companies to make sure what they are paying for is legitimate. The consumer now has a full year to settle those debts before they are eve eligible to be reported on a credit report.
If you have any questions or actually see some inaccurate medical debt information, please reach out to us. We are an experienced Law Firm that help people every day with credit issues.
Credit Law Center
1-800-994-3070
Author: John McCall
