You may be monitoring your credit report, or maybe you just can’t bear to look. Keeping an eye on your credit score is a good way to measure how well you are managing your debt. If your score is climbing, you are likely on track. However, if your score is falling or can’t break out of the range of unacceptable, you may be frustrated, especially if your score has dropped because of medical debt.
The Consumer Financial Protection Bureau reports that about 20 percent of the credit reports maintained by Equifax, Experian and TransUnion contain delinquent medical bills. If you are one of those 43 million people in Tennessee and across the country whose credit report has suffered because of medical debt, it may not help to know that such negative marks may remain on your report for seven years. Fortunately, a recent lawsuit has brought about a change that may impact many who struggle with medical debt.
Medical expenses have special circumstances
There are numerous reasons why medical debt creates a burden for people like you, including the following:
- Medical emergencies are difficult to anticipate or financially prepare for.
- You may not be able to predict the final cost of a medical expense, especially if it is catastrophic or chronic.
- While medical facilities may bill you in regular cycles, insurance companies do not always respond or pay within the payment deadline.
- Medical bills are notorious for mistakes that take time to correct.
- Often, you will have to dispute the coverage your insurance allows.
While these matters may delay your payment, the credit reporting agencies have not delayed to add late medical payments to the credit reports of consumers. Even when an insurance company comes through with benefits, the delinquent account remains on your credit report.
New rules bring a new outlook
New rules could change all that. Now the three main credit reporting agencies are forbidden to add delinquent medical bills to your credit report until 180 days have passed. This allows you time to sort out the mistakes on your bill and haggle with the insurance company. Further, if your insurance company comes through after the delinquency is already on your report, the credit reporting agency will remove it immediately instead of making you wait seven years.
Nevertheless, this may only be helpful if your delinquency is recent — within the past 180 days — or for future medical expenses. For now, if you have overwhelming medical debt, you may have to examine other alternatives.