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By Tom Murphy<\/div><\/div>\n

The three big credit reporting agencies now don\u2019t include medical debt in reports for banks, landlords, etc.; and they won\u2019t report small medical debts at all in 2023.<\/span><\/span><\/p>\n<\/div>\n

NEW YORK \u2013 Help is here for many people with medical debt on their credit reports.<\/span><\/span><\/p>\n

Starting July 1, the three major U.S. credit reporting companies stopped counting paid medical debt on the reports that banks, potential landlords and others use to judge creditworthiness. The companies will also start giving people a year to resolve delinquent medical debt that has been sent to collections before reporting it \u2013 up from six months previously.<\/span><\/span><\/p>\n

Next year, the companies also will stop counting unpaid medical debt under at least $500.<\/span><\/span><\/p>\n

The companies say these moves will wipe out nearly 70% of the medical debt listed on consumer credit reports.<\/span><\/span><\/p>\n

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.<\/span><\/span><\/p>\n

\u201cThese aren\u2019t people who bought shoes they couldn\u2019t afford,\u201d said Amanda Dunker, of the nonprofit Community Service Society of New York. \u201cThey went to a doctor because they were sick or needed help with an injury.\u201d<\/span><\/span><\/p>\n

Brooke Davis had about $1,300 in medical debt from a breast cancer scare that lingered for years on her credit report. 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.<\/span><\/span><\/p>\n

\u201cYou can\u2019t get anything, you can\u2019t even get a credit card if you have bad credit,\u201d she said.<\/span><\/span><\/p>\n

The non-profit RIP Medical Debt relieved Davis\u2019s debt last fall. But more health problems and the loss of a job have pushed Davis back into debt. She\u2019s currently stuck with a swollen knee for which she can\u2019t see her doctor.<\/span><\/span><\/p>\n

\u201cI don\u2019t have the money to really go for my knee right now, so I\u2019ve just been suffering with it,\u201d she said.<\/span><\/span><\/p>\n

The federal Consumer Financial Protection Bureau (CFPB) has said its research shows mortgages and credit cards are better predictors than medical bills of whether someone will repay a debt. The agency, which monitors banks, lenders and other financial institutions, has noted that people often don\u2019t have time to shop for the best price when they seek care and may have little control over the progress of a serious illness.<\/span><\/span><\/p>\n

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.<\/span><\/span><\/p>\n

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.<\/span><\/span><\/p>\n

The bureau is trying to determine whether unpaid medical bills should be included on credit reports. John McNamara, an assistant director with the bureau, declined to estimate when the agency might make a decision. It could propose a rule, after hearing from all sides on the issue, that would end the practice.<\/span><\/span><\/p>\n

Credit reporting companies also are considering whether medical debt should remain on the reports, said Justin Hakes, a vice president with the Consumer Data Industry Association. <\/span><\/span><\/p>\n

The three national credit reporting agencies \u2013 Experian, Equifax and TransUnion \u2013 announced the medical debt changes in March, after the bureau said it would hold those companies accountable for the accuracy of their reports.<\/span><\/span><\/p>\n

Patient advocates said those changes will help a lot of people. 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. \u201cIt gives more breathing room to deal with the insurance company or your provider,\u201d Wu said. \u201cEverybody has a story about that.\u201d<\/span><\/span><\/p>\n

Much of the medical debt that landed on Melina Oien\u2019s credit report several years ago was for bills that were under $500. The Tacoma, Washington, resident said she was living in an expensive place, Hawaii, where her former husband was stationed for the military. They were getting care for a daughter who had health issues that included a rare condition that affected her metabolism.<\/span><\/span><\/p>\n

\u201cWe would zero out our checking account with living expenses every month,\u201d she said. \u201cWhen you are counting out $5 for gas until the next payday, how do you pay a $30 bill?\u201d<\/span><\/span><\/p>\n

A severance package from the military eventually helped them pay their medical debt a few years ago. Oien said her credit score jumped about 70 points just from that. But before that happened, they had to deal with higher interest rates on any loans they took out, and they could only get a mortgage after her sister gave them money to pay down some debt.<\/span><\/span><\/p>\n

\u201cIt was embarrassing, it was very stressful,\u201d said Oien, who now works as a patient advocate.<\/span><\/span><\/p>\n

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\nAuthor: kerrys<\/p>\n","protected":false},"excerpt":{"rendered":"