Medical Debt & Your Credit: What Just Changed (Again)
We’re diving into a hot topic—medical debt and your credit report. A few months ago, there was hope on the horizon: a new federal rule from the Consumer Financial Protection Bureau (CFPB) aimed to eliminate medical debt from credit reports. But now? We’re back to square one.
What Happened to the Medical Debt Protection Rule?
The rule was supposed to protect consumers by removing medical debt from credit reporting agencies altogether. But in a recent lawsuit, the current administration signaled they wouldn’t support the law—and the judge struck it down.
➡️ So yes, medical debt over $500 can now be reported on your credit again. Ouch.
🇨🇱 But If You’re in Texas… There’s a Loophole
Texas residents have one small advantage thanks to a law signed by Governor Abbott:
📆 Medical debt cannot be reported to credit bureaus for 12 months.
This delay gives you time to negotiate, apply for financial aid, or pay it down—before it hurts your credit.
🧾 What You Can Do to Protect Your Credit (and Wallet)
If you’re facing a large medical bill, here’s what I recommend:
- Apply for financial assistance first.
Most hospitals (especially ERs) offer programs—even for ambulance rides. You may qualify for big discounts or extended payment plans.
- Wait for collections—but be strategic.
Once your bill is turned over to collections, the second or third letter may offer a 50% discount. This is common with lab and hospital bills.
- Negotiate for “payment in full.”
Call and offer a lump-sum payment for less. Always ask, “Will this be considered payment in full?” Get it in writing.
- Know your rights.
If the balance is under $500, it shouldn’t show up on your credit at all—even now. Use that knowledge if you’re being pressured unfairly.
🗳️ Don’t Like This Ruling?
Then speak up. Call your representatives. Pay attention to upcoming elections. The only way to change these policies is to hold lawmakers accountable.
Final Thought
Getting sick shouldn’t ruin your credit score—but until laws catch up, you need to be your own advocate.
If you have questions about medical bills, credit reporting, or financial assistance, let’s chat. I’ll help you navigate your options.
✅ Book a free consultation at jkappconsulting.com
