Your credit standing has a major impact on many aspects of your financial and personal life.
Having great credit carries benefits like getting lower-rate loans, easier approval to rent property and better car insurance rates. So it pays to stay on top of your credit — and of the ways credit scoring is constantly evolving.
Here are four big changes you need to know about credit reports and credit scores.
1. Most medical debt to be removed from credit reports
Starting this summer, the three main credit bureaus — Equifax, TransUnion and Experian — are implementing a series of changes that will drastically change how medical debt is treated on Americans’ credit reports.
Among the changes:
- Starting July 1, paid medical collection debt — bills that were turned over to a collection agency but eventually satisfied — will no longer appear on consumers’ credit reports.
- Also from July 1, consumers will get a full year to work out insurance or billing issues before unpaid medical debt gets reported on their credit files. Currently, this grace period is six months.
- In the first half of 2023, the credit bureaus will begin omitting all medical collection debt under $500 from credit reports.
The credit bureaus say these changes will remove roughly 70 percent of medical collection debt from consumer credit reports. That’s sure to be a welcome relief for the tens of millions of Americans who have an estimated $88 billion in medical debt on their ledgers, according to a February 2022 report
from the Consumer Financial Protection Bureau.