Medical Debt Won’t Go On Your Credit Report Right Away

An unexpected health care calamity can quickly burgeon into a financial calamity for your family.

According to the Oregonian, “just over half of all the debt that appears on credit reports is related to medical expenses, and consumers may find that their credit score gets as banged up as their body.”

But as we’ve reported, changes in the way credit agencies report and evaluate medical debt are in the works:

Starting Sept. 15, 2017, the three major credit reporting agencies — Experian, Equifax and TransUnion — will set a 180-day waiting period before including medical debt on a consumer’s credit report. The six-month period is intended to ensure there’s enough time to resolve disputes with insurers and delays in payment.

In addition, the credit bureaus will remove medical debt from consumers’ credit reports once it’s paid by an insurer. (Some credit scoring models don’t penalize paid medical debt from any source.)

The changes grew out of efforts by states to aid consumers: a 2015 settlement negotiated by New York Attorney General Eric Schneiderman and the three credit reporting agencies, and an agreement shortly afterward between the agencies and 31 state attorneys general.

The changes will be instituted nationwide beginning this month.