This browser does not support the Video element.
Families get medical debt break on credit reports
Medical debt unfairly damages credit scores and the big three credit reporting agencies agree. FOX 5 I-TEAM's Dana Fowle tells us about the big change coming to how medical debt is reported.
ATLANTA - More than half of Americans have medical debt that affects their credit worthiness. Getting sick isn’t planned over spending. It just happens. Now this chronic condition is getting some help.
The three big credit reporting agencies - Experian, TransUnion, and Equifax - announced that on July 1st, once your medical debt is paid off, it disappears from your credit report. It won’t ding you for seven, long years. The grace period for reporting this debt goes from six months to 12 months. That means that you have a year to pay it off before it shows up on your credit report. And finally, starting in 2023, any medical debt less than $500 won’t show up at all.
These are positive steps forward. The Consumer Financial Protection Bureau reports that in 2020 nearly two-thirds of bills in collections were for medical debt.
The medical journal JAMA writes that in 2020 the average overdue amount was $429. Starting July, you won’t have your credit wrecked over this unexpected expense.
WATCH: FOX 5 NEWS LIVE COVERAGE
This browser does not support the Video element.