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Credit Bureaus To Remove Majority Of Medical Debts From Credit Reports

Mike Chissell, Trusted Mortgage Advisor • Mar 22, 2022

I think we can all agree that the U.S. healthcare system has some issues. One of those issues should not be medical debt impacting people's ability to purchase a home. Unfortunately, we know the way Experian, Equifax, and Transunion (the three major credit bureaus) currently report this information does exactly that. Medical debt, especially derogatory accounts that have a late payment or are in collections, can greatly impact your credit score! Having a lower credit score absolutely affects your chances of being able to qualify to purchase a home.


Well, we have got some great news today!  Experian, Equifax, & TransUnion are making serious changes to how they will be collecting and reporting medical collections debts on your credit report.


The 3 major bureaus just announced that they will be removing up to 70% of the medical collections on consumer credit reports starting in July of 2022! This is massive, as derogatory medical collections can stay on your credit report for 7 years. They can even stay after they have been paid off, affecting your ability to apply for credit of any kind. A fantastic change that will help borrowers qualify for homes.


That’s not all. In the first half of next year, they plan to remove ALL unpaid medical collections under $500! This is going to remove a large majority of the medical collections currently plaguing borrowers, which will ultimately lead to an increase in credit score. 


As a final change, they will be increasing the amount of time they wait to report these medical collections on consumer credit reports. Increasing this time frame from 6 months to 1 year allows. This allows consumers more time to pay off claims or dispute false ones without them having to impact your credit score! All in all, some substantial changes will help consumers with all forms of lending, including mortgages.


If you are interested in applying for a mortgage or learning more about mortgage financing, please call us at Chissell Mortgage Group at (727) 376-6900.                      

 

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