New rules will limit the hurt from medical debt starting Sept. 15

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After more than two years of delays, new rules granting consumers some relief from the harm medical debt can do to their credit will finally go into effect.

Read more: These 2 pieces of negative info will no longer harm your credit score

Forgot about that medical bill? Don’t stress!

Beginning Sept. 15, the three main credit bureaus will enact rules they agreed to back in 2015 that require them to provide a 180-day cooling off period before any medical debt goes onto a credit report.

Equifax, Experian and TransUnion agreed to the rules as part of a March 2015 settlement with the Attorney General of New York and subsequent settlements with the attorneys general of 31 other states. Thankfully, the rules are being adopted nationwide.

The new rules attempt to bring order to the chaotic ways that some medical billing offices handle past-due accounts. Certain offices will refer a bill to collections after only 30 days. However, others will wait 60 days before sending an account to collections and still others will wait 180 days.

Giving consumers the benefit of the doubt for a full 180 days will hopefully provide enough time for financial responsibility to be determined between consumers and insurance companies.

It should also provide time for consumers to get funds together to pay balance bills, or to finally address that small medical bill forgotten at the bottom of the mail pile!

In addition, the bureaus have agreed to be diligent about pulling off medical debts that are belatedly paid by insurers after the 180th day. Be sure to check your credit report at to ensure those old medical debts are coming off as they should.

The latest numbers from the Consumer Financial Protection Bureau (CFPB) show that some 43 million Americans have an average of $579 in medical collections on their credit reports. Moreover, the CFPB finds 15 million of those people otherwise handle credit well; the medical debt is the sole factor fouling up their credit.

So what we’re seeing here is an effort from the credit scoring industry to give people who have medical debt a break.


To that end, the upcoming VantageScore 4.0 scoring model being introduced this fall by the three main credit bureaus will give less weight to medical collections versus other types of consumer debt.

(Editor’s note: VantageScore 4.0 is not to be confused with the FICO scoring model from Fair Issac Corporation. Your FICO score is widely used to assess credit risk in most consumer lending scenarios; your VantageScore is not.)

No matter how you slice it, the credit scoring tweaks should be a boon to consumers who only have medical debt on their reports. FICO estimates the boost to someone in medical collections but with no other debt will be somewhere in the 25-point range.

Finally, we all know medical bills can be confusing. If you want to be sure you’re not being incorrectly billed, consider hiring a claims assistance professional or medical billing advocate.

Claims professionals understand medical billing codes and have a deep knowledge of the health care billing process. If there’s something amiss on your bill, they’re likely to turn it up.

What they discover could save you hundreds or thousands of dollars!

Read more: Best ways to improve your credit score

2 pieces of negative info will no longer harm your credit score