May 23, 2022

Medical Debts to be Removed From Credit Reports

With the terrible economy, high unemployment, and loss of health insurance,  there are lots of people who have their credit score negatively affected by medical bills.

This is happening more and more considering the fact that the United States economy has been in disarray for the past several years. People are constantly struggling to get ahead and medical bills being listed as blemishes on a credit record can stop people from reaching their full potential.

There has recently been a proposal by Rep. Heath Shuler that would require that the three credit reporting agencies delete any medical debt of up to $2,500 within 45 days of the bill being paid off.

Right now when you have a medical debt it stays on your credit report for seven years even if you pay it off before then.

The bill has not yet been sent to the Senate, but supporters of it are hoping to see it voted on as early as the fall. If this is approved there are many people who would qualify for loans and credit cards that they were not formerly eligible for.

Opponents of the bill feel that taking medical debt off of credit reports gives credit card companies a false impression of the type of person that they are lending it to.

The main reason why credit reports are checked are so that lenders can see if the borrower usually pays debts back in a timely manner. Opponents feel that not having medical debt available on a credit report will lead to lenders not being paid back when they should.

While that may be a valid point, there are many people who cannot pay back bills right away because they have illnesses that require them to seek expensive medical treatments on a regular basis. Supporters of the bill feel like these people should not have a problem qualifying for mortgages and things of that nature because of something that is beyond their control.

In CNN’s coverage, a consumer credit specialist weighed in on the topic and he says that he believes the real problem is the fact that hospitals are not working with their customers enough to figure out why they have fallen so far behind.

Read more:
CNN Money
Unpaid Medical Bills Can Ruin Your Credit
Unpaid Medical Bills Can Negatively Impact Credit
How Medical Bills Affect Your Credit