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combatting identity theft through credit monitoring

Changes have recently been made to credit reporting that could have a positive impact on consumers. It’s important to continue to monitor your credit report and know your score. This will help individuals manage debt and prepare for the future. The new changes could potentially help to improve the consumer’s credit score which will help them in obtaining future credit.

Changes to Medical Debt

In the past, medical debt has been a barrier to individuals working towards improving their credit score. For various reasons, people have found themselves with insurmountable medical debt as a result of the lack of insurance, long-term illness, and the inability to pay these high costs—just to name a few. Medical debt has worked like other debt, remaining on your credit report for seven years after the account has closed. Beginning July 1, 2022, consumers will welcome a change to this reporting. Paid medical collection debt will no longer show on credit reports.

Another change to medical debt is the amount of time given to individuals to take care of unpaid bills before they are turned over to the credit bureaus. In the past, individuals had 180 days (six months) to take care of their debt by paying it off or working with the creditor to make payment arrangements. Also effective, July 1, 2022, the time period will be extended. Individuals will now have a year to pay off their medical debt or work out those payment arrangements. This provides the consumer enough time to contact and negotiate a payment plan with the creditor to avoid the debt being reported to the credit bureaus. This also provides enough time for consumers to make sure that everything is processed correctly with their insurance companies and healthcare providers.

During the first half of 2023, consumers will notice an additional change to medical debt reporting. Medical debt collection accounts under at least $500 will no longer be included on consumer credit reports.

These upcoming changes to medical debt reporting could result in a credit score increase. Monitor your credit report and watch for these changes. Keep in mind, it is important to consistently monitor your report and file a dispute if there are any inaccuracies. Request your free credit report at www.annualcreditreport.com. Consumers can request a free credit report from each of the three main credit bureaus: Equifax, Experian, and TransUnion. We are all entitled to one free credit report from each credit bureau annually. However, each credit bureau is offering free weekly credit reports through the end of this year. Also, keep in mind you will need to pay a small fee to obtain a reliable credit score.

Buy Now, Pay Later

Have you taken advantage of the offer to buy now, pay later? This is a common practice that consumers have taken advantage of, with more and more retailers offering this service. Some of these firms are Affirm, Klarna, and Afterpay. These services work like a credit card, allowing you to make a purchase and make payments later. Until now, these types of accounts have not been reported to credit bureaus. This change took effect in February with Buy Now, Pay Later accounts being reported to all three credit bureaus: Equifax, Experian, and TransUnion. If the buy now, pay later provider chooses to report your activity it can impact your score. Just with any type of account, if payments are made on time, you could see an increase in your credit score. However if payments are not made on time, this could result in a decrease in your credit score.

Practice monitoring your credit report and credit score on a regular basis as a part of your financial health. By practicing good financial habits, these changes may help you as the consumer with your credit health and financial future.