Congressman Dan Kildee Introduces Bipartisan Legislation to Prevent Unexpected Medical Bills from Hurting Credit Scores
Congressman Dan Kildee (MI-05), Chief Deputy Whip of the House Democratic Caucus, introduced new legislation, along with Congresswoman Katie Porter (CA-45), that would prevent people’s medical bills from counting against their credit score. The Medical Debt Relief Act would help address any potential medical debt Americans face due to coronavirus-related medical bills.
The bill would amend requirements for reporting medical debt under the Fair Credit Reporting Act. It institutes a 360-day waiting period before medical debt will be reported on a consumer’s credit report, giving Americans time to pay their medical bills before their credit report is affected. The bill also removes paid-off and settled medical debts from credit reports.
According to a report from the Consumer Financial Protection Bureau, medical debt overly penalizes people’s credit scores and does not truly reflect their credit worthiness. Many current credit scoring models also do not differentiate between medical and non-medical debt in collections. Medical debt can result from an event that is unpredictable and costly, and sometimes the debt is caused by billing issues with medical providers or insurers. According to the CFPB, many consumers do not even know they have a medical debt in collections until they get a call from the collections agency or they discover the debt on their credit report.
“Getting sick, including unexpected medical bills, is already a huge burden for families. We shouldn’t overly punish someone who unexpectedly gets sick by also penalizing their credit score, which affects their interest rates when it comes to their mortgage, car insurance and ability to get a loan. Especially during a global health pandemic, the last thing families should be worrying about is destroying their credit score,” said Congressman Kildee.
Congressman Kildee is also a cosponsor of H.R. 5826 the Consumer Protection Against Surprise Medical Bills Act which would protect patients from unfair and expensive surprise medical bills.
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