Medical Debts on Your Credit Report

When faced with health issues, most consumers, even those with
insurance, Past _due _imghave
a difficult time paying off medical bills that are not covered
under your policy.  Even with good financial planning the
common consumer would find it difficult to paying off these
exorbitant bills.  Regardless, if your medical debt goes
unpaid, it ends up on your report damaging 
your credit score
for a long period of
time.   

Currently, before Congress is the Medical Debt Relief Act
(“MDRA”), a bill that proposes assistance to consumers facing
insurmountable
medical debt
.  The purpose of the MDRA is to reward
consumers for their diligent efforts in eventually getting their
debt paid off.  The current state of the law is that even if
you pay off your debt in full, it will remain on your report for
approximately seven years, continuing to tarnish
your credit score
.  The Act would require the
credit reporting agencies
(“CRAs”) to remove any paid medical
debt under $2500, 45 days after payment was
made.    
  
The motivation for the MDRA is that a consumer with good credit
should not be punished for unforeseen circumstances, like failing
health.  Because credit scoring is supposed to gauge risk,
whether you as a consumer pay your bills
in a timely fashion
, pay off your loans and pay off your credit
cards every month, it seems unfair to include medical debt in this
category after if it has been paid off too.  The reason
medical debt should be looked at differently, is because it is an
expense you have no control over.

This MDRA will prevent credit reports of numerous consumers from
being unfairly tarnished, forcing consumers to pay higher interest
rates on loans and credit cards because of ailing health. 
Instead, Congress should reward these consumers for paying off
their debt by deleting it from a credit file after it has been
paid.  Unfortunately, this is not the first time the bill has
been before Congress.  While previous attempts to pass this
legislation have been futile, perhaps this time around there will
be greater success.

If you are having problems with debt collection of medical debts
and or issues with your credit
report
, contact SmithMarco P.C. for a free case review