Medical debt can be a major burden for many Americans, and it can have a lasting impact on your credit score. While medical debt remains on your credit report for seven years, the three major credit rating agencies (Experian, Equifax, and TransUnion) will remove it from your credit history once the insurer pays it. The Biden-Harris Administration is committed to leading the way and making it easier for Americans with medical debts to access credit. The federal government is one of the most important players in consumer credit markets, providing tens of billions of loans annually to millions of Americans and guaranteeing or maintaining up to 70% of all mortgages.
Fortunately, the Federal Housing Administration (FHA) has eliminated medical debt from consideration when assessing a borrower's creditworthiness. Vice President Kamala Harris has also announced reforms in four areas to ease the burden of medical debt, giving more American families a chance to thrive. If you're overwhelmed by medical bills, finding a good advocate or counselor from a nonprofit organization can be a big help. They can help you understand the health care delivery system and negotiate with providers on your behalf.
The Department of Health and Human Services (HHS) is also requesting data from more than 2,000 providers on medical bill collection practices, patient lawsuits, financial assistance, financial product offerings, and third-party contracting or buying practices. The Veterans Affairs (VA) is also making it easier and faster for low-income veterans to receive the forgiveness of their VA medical debt. On top of that, federal law prevents credit bureaus from including medical debts on your credit report until it's six months past due, giving you time to negotiate with your hospital or insurance company. The best way to ensure that medical debt doesn't hinder your credit or get you into legal trouble is to pay it off.
If you're unable to pay off the debt in full, there are other options available such as personal loans that could be used to pay off medical debt. However, it's important to remember that the statute of limitations for your debt is largely defined by the type of contract that governs the debt.The Biden-Harris Administration is committed to leading the way in making it easier for Americans with medical debts to access credit. With the right resources and strategies in place, you can get rid of medical debt and improve your credit score.