COLORADO SPRINGS — Colorado is the first state in the nation to pass a law that removes medical debt from credit reports, helping many people in our state improve their credit scores. News5 is looking into the impact of this change and why ultimately it’s up to us to make sure medical debt is actually removed from our credit reports.
When it comes to why lawmakers felt this was needed, the numbers tell the story. According to the Colorado Center for Law and Policy it’s estimated at least 700,000 Coloradans are in medical debt owing more than $1.3 billion. It also points out one in eight of us in Colorado have medical debt that’s been sent to collections.
”My daughter had her appendix rupture, so that was a huge bill and we didn’t have insurance. So, we were kind of sideswiped and we had just moved here,” Starla Dillinghan told News5. ”Three day hospital stay, all the surgery, so it was well over $50,000 right off the bat.”
Fortunately for Dillingham and her family, a new law in Colorado now allows consumers to have medical debt removed from their credit report. She says it’s been a blessing.
”That helps tremendously because it helped boost our credit score and our debt to income ratio. So, it incredibly helped us in our situation," said Dillingham.
Faith Boone is a local credit repair specialist who expects this to be life changing for many people who were held back by debt and bad credit scores in the past.
”We’re going to see scores go up which is going to give people a little bit of a piece of mind and again it’s going to be easier to go rent, get a job, get that consolidation loan, whatever it may be. It’s going to make it easier for them to get lending now,” said Boone.
Allison Hill also works in credit repair and says even with this law on the books, it’ll be ultimately up to individual consumers and credit repair experts to hold the credit bureaus accountable for the changes.
”I can absolutely tell you these credit collection companies are totally going to say oh well we didn’t know it was medical, right? And that’s where the verification process is going to come in with a credit repair company. We’re going to ask them to verify the debt, we are going to ask them what the debt was for and for the contract. They are then going to realize it was medical and they’re going to have to pull it off,” said Hill.
“You can go to annualcreditreport.com to get copies of your credit reports and review them to see if your medical information is still on there,” Julia Char Gilbert, Connelly Policy Advocate Colorado Center on Law and Policytold our news partners at Denver 7. “ If you do see an error, like if your medical data is still showing up even though this new law prohibits that you have the right to take action and file what's called a dispute.”
If you review your credit report and do find medical debt is still being included, you can file a dispute with the credit bureaus over the phone, online, or by mail.
Here are some resources from the Consumer Financial Protection Bureau to help you in that process.
This medical debt law in Colorado is scheduled to be on the books until July of 2028 unless lawmakers take action to renew it.
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