The three major U.S. credit reporting companies will stop counting paid medical debt on reports that entities use to judge creditworthiness.
Starting Friday, the three major U.S. credit reporting companies will stop counting paid medical debt on the reports that banks, potential landlords and others use to judge creditworthiness. The companies also will start giving people a year to resolve delinquent medical debt that has been sent to collections before reporting it — up from six months previously.Read More:
Patient advocates call that a huge advance. But they question whether medical debt should be on credit reports at all, given that many see it as a poor indicator of whether someone is trustworthy for a loan or rent. The 48-year-old McDonough, Georgia, resident said that made it difficult to rent an apartment, and she needed a co-signer for a car loan.The non-profit RIP Medical Debt relieved Davis’s debt last fall. But more health problems and the loss of a job have pushed Davis back into debt. She’s currently stuck with a swollen knee for which she can’t see her doctor.
Medical billing errors can wind up on credit reports. And patients are sometimes unsure about what they owe or whether an insurer will eventually pay it.The agency said earlier this year it estimates that 58% of the debt in collections and on credit records is from medical bills, and past-due medical debt is more prevalent among Black and Hispanic people.John McNamara, an assistant director with the bureau, declined to estimate when the agency might make a decision.
The wait in reporting delinquent debt will give patients time to figure out how to resolve a bill, noted Chi Chi Wu, an attorney with the National Consumer Law Center.
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