BEAUMONT, Texas — Big changes are coming to credit reports billions of dollars worth of medical debt will be wiped away starting this summer July 1.
No one likes old medical debt hanging around on their credit report, but sometimes life throws you a curveball, and all of a sudden you have an unexpected medical bill.
This was the case for Rachel Bertrand. It was a normal day for her until the unexpected happened.
“I woke up and I couldn't move one of my arms my leg I couldn't stop vomiting from the pain I was having in my head,” Bertrand said.
Bertrand’s mother rushed her to the hospital where she was life-flighted to Houston for surgery.
“They saw that I had a brain bleed and one of my aneurysms had ruptured,” Bertrand said.
Bertrand was born with a rare brain disorder and has undergone seven surgeries. Now, she's uninsured and medical bills are piling up.
“[It's] well over $100,000," Bertrand said. She said that number is on her credit report, and it's stopping her from making personal purchases like buying a house.
That's why for people like Bertrand, it's big news that the top three credit reporting agencies Equifax, Transunion, and Experian say it's changing how it handles medical debt on credit reports.
“The medical debt situation is the number one cause of bankruptcy in the United States over 43 million people are in medical debt,” Allison Sesso said.
Sesso is the CEO of Rip Medical Debt is a nonprofit charitable organization that takes donated dollars and turns them into medical debt relief. She said there are limitations to the new changes.
“There's people with medical debt over $500 that this wouldn't impact I also at the same time want to be clear that this does not solve the medical debt problem people still owe the debt,” Sesso said.
So what will change starting July 1?
- Paid medical debt will be dropped from credit reports. You would usually have to wait up to seven years.
- New unpaid medical debt won't appear for 1 year. It used to be six months.
- Medical bills in collections won't show up at all if it's under $500.
“I don't have $100,000 and that would help me a lot because I do what I can to pay,” Bertrand said.
All of these changes could lead to better credit scores, and if you do owe more in medical bills than your income you may qualify for Rip Medical Debt.