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What you need to know about credit scores and medical debt

On Behalf of | Dec 1, 2022 | Medical Debt

No one looks forward to falling ill or getting hurt in an accident – or the big medical bills that follow. The medical debt can be compounded if you happen to be out of work due to your condition, especially if that affects your insurance entitlement.

But how does your medical debt impact your credit score? Here is what you need to know about your medical debt and your credit score

The damage from medical debt is being somewhat reduced

Effective July 1, 2022, any paid medical debts will be deleted from your medical report and, thus, will not affect your credit score going forward. Of course, newer credit scoring models do not take paid debts into account, so you may not necessarily notice a change in your score. However, if you are using older scoring models, then you should notice a change in your score upon paying your medical debt. 

If your medical debt is under collection, it will not show up in your report until it’s gone a solid year without payment – and medical debts under $500 might not be recorded on your credit record at all.

This gives you some room to work with your healthcare provider or insurance company when there are disputes regarding your bills. Just the same, the health care system leaves many people burdened with medical debts that just won’t quit – and it isn’t unreasonable to consider other options, including bankruptcy.

Debt can give you sleepless nights. Knowing your legal options can help you safeguard your rights when settling your medical debts. 

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The Law Office of Kim Covington, is a woman owned debt relief agency, and I have helped families, individuals and small businesses, file for bankruptcy relief under the U.S. Bankruptcy Code, for over 24 years.