Medical debt dropped from credit scores: Here's how you can make sure it's removed

SAN FRANCISCO (KGO) -- Billions of dollars of medical debt are being removed from credit reports. Why? It just wasn't fair.

"Medical debt has always been a problem because it's different than credit card debt. It's not like you go out and buy a whole bunch of things, and don't pay it off. If you're sick or in a car accident and wind up in the hospital, you have no idea what it might cost you, what the insurance company might pay, and what you might get stuck with," says Checkbook.org contributing editor Herb Weisbaum.

Weisbaum knows all about medical debt. He has reported on it and defended consumers for decades.

Bobbi Payton, on the other hand, learned about the issue the hard way.

MORE: Equifax, Experian and TransUnion to wipe out most medical debt on credit report

"I am still paying for a surgery I had back in January," Payton says.

The single parent worries about medical debt showing up on her credit report and with good reason.

"Don't be late. If you are a day late, there is a phone call," says Payton.

And it is not a happy one.

"I had that happen last month. I have an automatic credit come out of a (account)," she says. "I was $6 short on making that payment through my account, of course it was denied. I got a phone call the next day."

There is good news for Payton and others stuck in her situation. The three major credit reporting agencies are making big changes.

Right now, medical debts won't be reported for a year. Soon, those under $500 won't be reported at all and paid bills won't hang around to haunt your credit score.

Melinda Opperman is with Credit.org. "As of July first of this year, new changes went into effect that said collections that were paid will not even be included on a consumer's credit report," she says.

Great news, but there is a catch.

"Remember, this is voluntary," says Weisbaum. "The credit bureaus have agreed to do this on their own. So if you had a situation where medical debt was reported on your file, and they say they're going to remove it, you need to check your credit report and make sure they've done it."

If you need help, there is help available.

"That's where working with a nonprofit consumer credit counselor can help," says Opperman. "We are the first line of defense. We offer free counseling that is unbiased, it is objective and it is neutral."

If you have or had medical debt, go to AnnualCreditReport.com, and pull each of your three credit reports from Experian, Equifax and Trans Union, and make sure that medical debt has been erased. You can't take this for granted.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

7OYS's consumer hotline is a free consumer mediation service for those in the San Francisco Bay Area. We assist individuals with consumer-related issues; we cannot assist on cases between businesses, or cases involving family law, criminal matters, landlord/tenant disputes, labor issues, or medical issues. Please review our FAQ here. As a part of our process in assisting you, it is necessary that we contact the company / agency you are writing about. If you do not wish us to contact them, please let us know right away, as it will affect our ability to work on your case. Due to the high volume of emails we receive, please allow 3-5 business days for a response.

If you're on the ABC7 News app, click here to watch live