Credit Score

Leslie Tayne Explains How Erased Medical Debt Won’t Hurt Consumer Credit Scores July 1, 2022

SALT LAKE CITY (ABC4) — The high cost of health care in the United States has created financial hardship for many families. Even small unpaid medical bills can have a big impact on credit scores.

ABC4 spoke with Leslie H. Tayne, consumer credit expert and financial lawyer who specializes in debt relief and settlement, about the changes in how medical debt influences personal credit scores.

Tayne reports that beginning July 1, 2022, offset medical debt will be removed from credit reports by Equifax, Experian and TransUnion.

It used to be that an overdue medical debt that was later paid off could still negatively affect a person’s credit score. That’s about to change, and Tayne says it can lessen the damage to Americans’ credit scores from the nearly $88 billion in medical debt that currently exists in the United States.

To benefit from this change, debtors must discharge all their medical debts before July 1st. If they do, these past debts will no longer be charged against their credit.

This change will not result in debt cancellation or medical debt having no impact on credit rating, but may still benefit many debtors with low credit ratings and medical debt erased.

Additionally, Tayne tells ABC4 that in early 2023, “medical collection debts under $500 will completely stop showing up on credit reports.” She mentions that small copayments of $50 to $100 often go unpaid, negatively affecting people’s credit scores.

This upcoming change will only allow a large unpaid medical debt to hurt a person’s credit in the future.

Finally, Tayne advises readers to “always review your credit report regularly” and stay financially organized. She says to stay on top of medical bills and to contact health insurance companies frequently to clarify information about coverage and bills.

“Always question an invoice,” concludes Tayne.