Credit reporting changes in July

Anyone who has struggled to pay off medical bills will get a boost this July as medical credit reporting changes.

Among the changes announced by all three major credit reporting agencies (Equifax, Experian, Transunion):

• Old medical bills that have been paid will no longer appear on credit reports. Medical debt is currently reported for seven years after it is paid off.
• Unpaid medical bills will appear on a credit report only if they remain unpaid for 12 months. Right now there is a six-month grace period.
• Medical debt in a collection that is less than $500 will not appear on credit reports. This move is expected to clear 70 percent of medical collections from credit reports.
• Credit reports are designed to give lenders, in particular, an idea of whether a person will pay their debts. But 66 percent of medical debts are one-time unexpected and unpaid medical bills.

The credit agencies say the medical debts don’t provide an accurate picture of whether a person regularly pays his or her bills.