July 10, 2019

How long does medical debt stay on your credit report?

Dear Consumer Ed:

How long does medical debt stay on your credit report?

Consumer Ed says:

Medical debt can remain on your credit report for up to seven years. After that time has elapsed, the debt should disappear from your credit report and, as a general matter, should no longer impact your credit rating.

You should also note that some new rules that took effect on September 15, 2017, have lessened the harm medical debt can do to your credit in some key ways.  The changes are the result of a 2015 settlement with the three major credit reporting agencies (Equifax, Experian and TransUnion). The credit reporting agencies must now wait 180 days before putting an unpaid medical bill on your credit report. In addition, unpaid medical bills that later get paid by your insurance provider must be removed from your credit report so that they don’t continue to hurt your credit score.

What if you pay off the debt yourself?  If you pay off the debt yourself after it has already appeared on your credit report as a collection item, the debt can still remain on your report for up to seven years. However, the effect it will have on your credit score will vary depending on which score your lender is using. For example, some of the newer scores weigh unpaid medical collection accounts less heavily than other types of collection accounts, and some scoring models actually ignore collection accounts altogether if they’ve been paid.  Unfortunately, not all lenders use the most recent credit scoring model. In fact, the scoring model that is most widely used as of this writing treats medical collection accounts, including those with a zero balance, just like other collection accounts. 

You can always request copies of your credit report if you want to see what collection items it contains and verify that all of the information reported is accurate. Federal law gives consumers the right to a free credit report from each of the three major credit reporting agencies each year.  To get your free copies, visit annualcreditreport.com. Georgia residents are entitled to an additional two free copies each year. To request those additional copies, you will need to contact the credit reporting agencies directly. Please note that because of the financial impact of the COVID-19 pandemic, the three credit reporting agencies are offering free weekly credit reports through December 31, 2022. 

Submit your own question to Consumer Ed.  Remember…we do not give legal advice. Always consult a lawyer about legal issues.

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