A decision by the big three rating agencies could have a major impact on Americans feeling the burden of medical debt.
it’s a major development for the 20% of US households struggling with medical debt. Equifax, experian and Trans Union say they will erase nearly 70% of this debt from credit reports if it has been paid off. New medical debts will not be added to credit reports until a year after they are turned over to collection agencies, rather than six months. Debts under $500 will not be added at all. Relief for people like Cheryl Montgomery who thought she had paid her hospital bills. But collectors kept coming. As my credit score accumulated 60 points as a result of this. That’s pretty significant when it comes to interest rates, 43 million Americans have medical debt potentially affecting their credit rating and their ability to get a car loan, buy a new home, or even find a new job. We are concerned that the credit reporting system has been used as a tool of coercion to force people to pay medical bills when they may or may not even be insured. Americans have taken on even more medical debt during the pandemic. In a joint statement, credit rating agencies say that after two years of the COVID-19 pandemic, we are making changes to help people focus on their personal well-being and recovery. Financial advisors recommend people in debt, negotiate directly with the doctor or hospital who may offer much more affordable payment plans rather than using a credit card with a high interest rate