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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.
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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.