About 45% of Americans have had their medical debt washed off their credit report — here's how to make sure you're clean

Millions of Americans struggle with medical debt

Medical expenses account for more than $200 billion in debt in the U.S., says Krutika Amin, associate director for the program on the Affordable Care Act at the Kaiser Family Foundation.

About $88 billion of those debts are reflected in consumers’ credit reports, according to the CFPB.

And it’s not just a small minority accounting for those massive numbers. Four in 10 adults say they have some type of medical debt, whether that’s owed to family members, credit cards or hospitals and doctors, according to Kaiser Family Foundation data.

“And a lot of that debt, most of that debt is over $1,000,” says Amin.

According to a survey from LendingTree, the new policy will benefit the 23% of Americans with medical debt and the 22% who’ve previously had it.

And while it doesn’t erase that debt or make healthcare any cheaper, Amin says it should relieve a burden for many.

“At least this way, it helps free up credit-related issues for people with medical debt that will help people who need credit to buy a home or a car, or rent an apartment,” says Amin.

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Don’t forget to check your credit report

The changes should already be reflected in your score, but it’s still best to verify that for yourself.

McClary suggests going to annualcreditreport.com to ensure any medical debt has come off.

“Pull a copy of your credit file from all three of the major credit bureaus — it's very important because you want to get a complete picture of what is showing up on each and what you should see on your report,” he says.

Each reporting agency manages its own records so you can’t assume that just because one is correct that the other two will be too. Which is why McClary emphasizes the importance of pulling your report from all three agencies.

“We've seen in the past that there are reporting … discrepancies, based on what shows up on Experian and what shows up on TransUnion or Equifax," says McClary. "Those are not common occurrences, but it is likely that it could happen based on reporting errors, or some other mishap.”

Each of the major credit bureaus allows you to get a free credit report once a year. Experts recommend going through your report line by line to ensure it's all accurate. And make sure you check the “Account Information” or “Collections” section of your report.

“If you see anything that runs counter to what you're expecting, based on your understanding of the recent changes, you can file a dispute directly with the credit bureau that's reporting the information incorrectly,” McClary says.

Fixing your score might take a little more effort

Under federal law, a bureau has to investigate a dispute within 30 to 45 days and then tell you the results within five days after that. If you’re still not satisfied, you can submit a complaint to the CFPB.

But because of how debt is calculated on your credit score, removing some paid debt may not have as big an impact as you might hope.

McClary suggests tempering your expectations when checking your new credit score.

“If you're talking about small dollar balances of medical debt, or medical debt that's already been paid off, you're talking about things that are already having a minimal impact on your overall credit,” he says.

“It's really about the proportion of medical debt versus other types of debt that might be reporting on a typical credit file.”

In the meantime, there are a few other options you can explore to boost your score:

• Review your credit report. If you find any outstanding debt that has been sent to collections, pay it off as soon as you can and remove any inaccurate information.
• Pay your bills on time. Avoid paying off any of your bills late. If you’re forgetful when it comes to regular monthly expenses, try setting up automatic payments.
• Don’t use all the credit you have available. You want to use less than 30% of the credit that’s available to you to maintain a good credit score, according to Experian.
• Keep old accounts open. Consider holding onto that old credit card even if you don't use it. According to Equifax, old accounts extend the length of your credit history, which has a positive effect on your credit score.