Medical expenses can plague a person’s credit and peace of mind for years.
If you’re one of the few Americans who have successfully paid their medical debt after falling behind, your credit score is affected for seven years afterward, jeopardizing your ability to receive future loans and making it difficult to improve your creditworthiness.
This is why several groups are asking Congress to consider the Medical Debt Relief Act (H.R. 1767).
- Oregon Sen. Jeff Merkely and California Sen. Maxine Waters introduced this bill in January of 2013. Passage of this legislation would ensure any paid—or settled—medical debt less than $2,500 will be removed from a credit report 45 days after it’s paid. Currently, the legislation is with the Banking, Housing and Urban Fairs Senate Committee for debate.
In essence, advocacy groups argue that consumers are being wrongly burdened by former debt and/or inaccurate credit scores because of a system flaw that allows this misinformation to remain active on a person’s credit score, even when debt is settled. This flaw significantly reduces a consumer’s credit score and therefore his/her borrowing ability.
Sen. Waters articulated the reasoning of the proposed legislation:
“The consumer should not continue to be arbitrarily penalized. The solution to this problem is simple and fair; information about a medical debt should be removed from a credit report once it is fully settled or paid. This information should not linger on a consumer’s credit report, like an albatross around their neck, making it more difficult for them to obtain credit for years to come.”
People with health care costs using credit cards to make payments, or who are borrowing money to pay these debts, should care about this bill for the following reasons:
- Pay less expensive borrowing fees
- Pay less expensive interest rates
- Achieve an improved credit score
If you have lingering health costs that are ruining your credit, you can take steps to paying your debt to strengthen your credit score.
Decrease Your Medical Debt
Have you considered a credit repair agency to help you manage your medical debt? We can help. Call 1-866-639-3426 or browse our website to learn about how we can assist you with improving your credit score as well as reducing your health care balance.