Credit Bureau Changes Will Ease Medical Debt Pain for Just a Few

Too many Americans have bad credit because of unpaid medical bills. But despite two reforms in how those bill will be reported to credit burueas, the Fort Leavenworth Lamp reports “that’s not likely to change any time soon.”

Here’s what changes starting Sept. 15:

  • There will be a 180-day waiting period before unpaid medical debts can show up on people’s credit reports.
  • Medical collections will be deleted from credit reports if they’re paid by health insurers.

But the waiting-period change will help only a few, according to an analysis by FICO, the leading credit scoring company.

Its data scientists found that only about 200,000 people, or less than 0.1% of the 220 million people with a credit report, will be helped by the six-month reporting delay.

‘This isn’t going to have a substantial impact,’ says Ethan Dornhelm, vice president for score and analytics at FICO.

That’s because the waiting period just codifies what’s already common practice. Medical providers may hire collectors to contact patients when bills are as little as one day overdue, but the debts typically aren’t reported to the credit bureaus until at least 180 days have passed since the default, says Rick Gundling, senior vice president at the Healthcare Financial Management Association, a trade group.