For a third year in a row, the Medical Debt Responsibility Act has been introduced in Congress. The bill would require that credit bureaus delete reports of any delinquent medical debt not exceeding $2,500 within 45 days after the debt is resolved. The bill’s sponsors argue that medical debt is unlike other types of debt and not a good indication of credit worthiness, not to mention that delinquent medical debts are oftentimes a result of inaccurate billing.
The introduction of the Medical Debt Responsibility Act comes on the heels of the announcement by VantageScore Solutions, the company that generates credit scores, that it will no longer include delinquent paid debts in its credit score calculations. See here: http://www.americanbanker.com/issues/178_47/credit-scoring-model-bucks-industry-line-on-paid-debts-1057370-1.html
Basically, your credit report will still reflect your delinquent paid debts, but your credit score will not. If the Medical Debt Responsibility Act passes, then delinquent paid medical debts of $2,500 or less will no longer appear on the credit report either.
All in all, this means that delinquent paid debts have less effect on your credit, which is just another reason to settle those debts instead of filing for bankruptcy. If you have delinquent medical debt or other unsecured debt, such as credit card, then contact a debt settlement attorney who can work with you to get the debt paid and no longer affecting your credit score.
Kevin Fallon McCarthy
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