Although medical debt is prohibited on credit reports, experts encourage those who owe to pay what they can and tip

CHICAGO (WLS) — Although creditors are prohibited from considering medical debt for those seeking a loan, experts say those who owe money should still pay what they can.

This is great news for those who are struggling: medical debts cannot be held against you if you try to open a credit card, get a home loan, or get a car loan.

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The Consumer Financial Protection Bureau’s recently finalized rule will erase about $49 billion in unpaid medical bills from the credit reports of about 15 million Americans.

“It was a really important thing to adopt, because credit scores are pulled for everything from a mortgage to a car loan, to renting an apartment, and quite often even for employment, and “So advocates for change say that medical debt should not prevent someone from buying a home or getting a car loan because many medical events are unexpected,” said Ashlee Walton, certified financial planner at Goldstone Financial. Group.

Walton is part of the group based in the western suburb of Oakbrook Terrace. She says that even though the law means medical debt won’t affect your credit score, you should still try to pay it off.

“You still want to pay it, you still have to. You still want your same doctors, you want your hospitals. It’s still a good idea to pay it. It affects people more who are not able to pay it. ” Walton said.

A recent study of Loan tree claims that 55 percent of Americans have been burdened by medical debt, and half of them have been sent to collections.

Experts say you should negotiate with the billing agency, create a payment plan and seek financial assistance from the hospital or medical facility. Look for errors on bills, contact your insurance company and ask if they should have covered more.

Walton also says there is a pushback on the new medical debt rule medical industry and others.

“Maybe people will just say, ‘I’m not going to pay this medical bill because it’s not going to affect my credit score anyway.’ And then they’re also worried that these collection agencies are going to be impacted. It could hurt their day-to-day work if all of a sudden a lot of their business is no longer available there,” Walton said. .

Two industry groups filed lawsuits last week trying to block the new medical debt rule. Additionally, a prominent Republican lawmaker in the House of Representatives said he would take action.

There’s a chance this situation can be reversed, but the good news for consumers is that three credit reporting agencies already decided to remove medical debt from their reporting years ago. This new law goes even further by banning all of this.