There’s Some Good News About Unpaid Medical Bills and Credit Reports
If you're like most Americans you may have a lot of unpaid medical bills that is doing a lot of damage to your credit rating and finances. The situation has gotten worse, a lot worse. Over the past 2 years with the COVID-19 pandemic, there is an estimated 88 billion dollars worth of medical debt currently on credit reports today. If you were hospitalized or had additional medical expenses due to the Coronavirus you know all too well just how big the medical bills can be and what it does to your credit. Well, we have some good news.
It was just recently announced that Equifax, Experian, and TransUnion will be removing around 70% of unpaid medical bills from individual credit reports. That's some great news! The damage done by medical debt and unpaid bills to people's scores has been tremendous and has created all kinds of financing and interest issues. Honestly, I don't think medical bills and debt should be anywhere on your credit report.
The problem is most hospitals and doctor's offices use third-party collectors and they report to all the credit agencies whenever you have unpaid balances which in turn damages your credit rating and finances. This type of debt isn't something a person did deliberately. It's not like they made a purchase and renigged on it by not making the payments. Now a lot of places overlook medical debt, but some don't. Or a third-party collector places a non-payment on your credit report and it isn't clear that it's medical related.
Due to all the unpaid medical bills and debt it's seriously slowed any and all credit purchases for most people. Either they were denied due to their credit score or the interest rates for less than stellar credit was too high to even consider. Because of this, the credit reporting agencies are removing unpaid medical bills or a lot of it anyway to free up credit and assist with economic recovery. While this is being done primarily to help stimulate the economy a lot of people are still going to benefit from this and have their scores improved.