45% of Americans could benefit from removing medical debt from credit reports | KAMR

AMARILLO, Texas (KAMR/KCIT) — Beginning Friday, three national credit reporting agencies will remove nearly 70% of medical debt from credit reports and, according to LendingTree, up to 45% of Americans could benefit .

Paid medical debt will no longer appear on consumer credit reports starting July 1. Similarly, unpaid medical debt will not appear on credit reports for a year, up from six months previously. And in the first half of 2023, the three agencies will not include medical debts under $500 in credit reports.

John T. McElyea, senior vice president of National Bank Amarillo, said the relief could help consumers get a better credit score.

“Potentially, by removing them, millions of consumers could be helped to have these chargeable medical items removed from their credit reports. Again, this will help their credit scores and generally with better credit scores they can get lower interest rates on different types of loans,” McElyea said.

The main drivers of medical debt are often unpredictable and often necessary procedures. These include emergency room visits, doctor or specialist visits, surgery, childbirth and dental care.

Mcelyea said even if the medical item is paid off, the debt can stay on the credit report for up to seven years.

“Which can still have a negative effect on the consumer’s credit rating,” McElyea added.

He said medical debt may not accurately reflect a person’s credit score and how well they pay their bills.

“Because this is a one time emergency as they have paid for these medical items being removed instead of remaining on their reports for up to seven years and they will be removed now and that will certainly benefit many of these consumers,” said McElyea.

Mcelyea added that if you have questions about your credit, talk to your bank.

“We are able to help, we will advise you where we need it on any consumer credit item,” McElyea said.

According to LendingTree, on average, Americans with medical debt owe between $5,000 and $9,999.