Did you know that medical debts under $500 should not be on your credit report?
This agreement was made between the credit reporting agencies in April of 2023 and is reported and monitored by the Consumer Financial Protection Bureau (CFPB) . It does not mean that you will not get letters or communications about any such small debts, but it does mean these small medical debts will not be reflected by the big three reporting agencies (TransUnion, Equifax, Experian).
It is also unacceptable for a creditor to attempt to skirt this by aggregating unrelated debts to attempt to get over the threshold as it would be considered deceptive.
If you are facing this issue and need help, contact an attorney or local legal aid office (note: you do not need to have an attorney to fight these issues, you can do it on your own – articles like this are meant to help with just that). This is federal – not law, but an agreement between the three agencies nationwide, so it should be applicable in all states in the US, but you should consult an attorney for specific legal guidance for your situation.
From the CFPB:
The changes recently introduced by the nationwide credit reporting companies cover all medical bills reported to them by debt collectors, also known as medical collections. One of the first steps you can take is to check your credit reports for any outstanding medical bills. Currently, Equifax, Experian, and TransUnion are offering free online credit reports once a week through AnnualCreditReport.com.
- If you previously had a medical collection under $500, a paid medical collection, or a collection less than a year old on your credit report, check to make sure they no longer appear on your reports. Be aware, however, that this doesn’t include credit card collections, even if you used your credit card to pay for a medical expense under $500.
- Also, while you’re looking at your reports, check for any other information that might be inaccurate.
- If you find a medical collection under $500, a paid medical collection, a collection less than a year old, or errors on your report, you can dispute that information with the credit reporting company.
In addition, the nationwide credit reporting companies have announced that they’re extending the amount of time you have to dispute, negotiate, or pay for any outstanding bills before they can be reported. Previously, unpaid medical bills were generally furnished to credit reporting companies after 60 to 120 days, but the nationwide credit reporting companies are now waiting one year from the time you saw a doctor before they’re allowing medical debt to appear on your credit report. If you’re unable to pay your medical bills, you may qualify for financial assistance programs, often called “charity care.”
If you find invalid medical bills on your credit report or if you’re having issues disputing other medical bill errors with the credit reporting companies, submit a complaint to the CFPB.