This Type of Debt No Longer Can Harm Your Credit Score

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Woman with surprise medical bill
Antonio Guillem /

Millions of Americans have run up big medical bills, incurring debts they struggle to pay. Now, they no longer have to worry as much about how such unpaid obligations will impact their credit score.

The big three credit-reporting companies — Equifax, Experian and TransUnion — announced earlier this year that they will remove nearly 70% of medical collection debt tradelines from consumer credit reports. (A tradeline is an individual account that appears on your credit report.)

The new policy goes into effect on July 1.

The new policy includes two major changes:

  • Paid medical collection debt no longer will appear on consumer credit reports.
  • Those with unpaid medical collection debt will have one full year before this type of debt appears on their credit report. The previous standard was six months, but the change will give debtors more time to work with creditors to find solutions to their debt woes.

In addition, sometime in the first half of 2023, the credit-reporting companies will stop including medical collection debt under at least $500 on credit reports.

In a joint statement announcing the changes, the three credit-reporting companies pointed out that medical collection debt often is the result of “unforeseen medical circumstances” and that they believe the changes will help promote “fair and affordable access to credit for all consumers.”

In the announcement, the companies point to data from the Kaiser Family Foundation that finds two-thirds of all medical debts result from a single-event or short-term medical expense incurred when an acute medical need arises.

For more on boosting your financial profile, check out “7 Ways to Boost Your Credit Score Fast.”

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