Readers of this blog know that we post about eliminating medical debt often. And, back in May, we posted about how the three major credit bureaus (Equifax, Experian and TransUnion) were changing how they treat medical debt. And, indeed, billions of dollars in medical debt have been cleared this month from the credit reports of many Americans. However, do not forget to check your own credit report to make sure your Indianapolis, Indiana, medical debt has been cleared.
Which debts should be gone?
Paid-off and settled medical debt should no longer be on your credit report, as of July 1. This debt would normally stay on your report for 7 years, but now, once it is paid off or settled, it should be cleared from your credit report. In addition, all medical debt that is not at least a year old should now disappear as well. And, next year, any debt under $500 will also automatically be deleted from your credit report.
When and why
TransUnion, Equifax and Experian announced these changes back in March of 2022. The announcement was made after the U.S. Consumer Financial Protection Bureau (CFPB) reported that most medical debts were incorrectly reported to consumer credit reports. This is a massive liability as it represents nearly $90 billion in debt, according to the CFPB.
Who does this affect?
According to the Kaiser Family Foundation, this change in Indianapolis, Indiana, medical debt reporting will affect 40% of United States adults. And, LendingTree reports that these updated policies will benefit 23% of Americans (about half of those with debt).
How do I check if my debt has been removed?
You can check your credit reports for free on annualcreditreport.com. You can pull your credit reports for free once a year. According to the three credit bureaus, the new policies will affect your credit automatically and do not just check one report. Just because one report is correct does not mean that all three are correct because each credit agency is responsible for its own records.
What if my medical debt has not been deleted?
Each credit agency has an online dispute tool. If you see that your settled or paid-off Indianapolis, Indiana, medical debt has not been deleted, dispute it. If you notice medical debt that is not at least a 1-year-old reported dispute it. And, if you see anything else that should not be there, dispute it. Each bureau will then have 30 to 45 days to investigate the dispute, and if you are not happy with their decision, submit a complaint to the CFPB.