Medical debt is like an out-of-control IV drip on a mad night out, hitting US consumers with a financial hangover they never asked for. Ouch! In the land of the pricey band-aid, where breaking a leg can leave you with a heart attack-inducing bill, the fact that medical treatment isn’t a voluntary purchase seems to have finally sunk in.

The credit reporting angels – Equifax, Experian, and TransUnion – have waved their magic wands and declared that medical bills under $500 will vanish from consumer credit reports like the ghost of “I can’t afford this” past. It’s a big thumbs-up for loads of not-so-loaded young people whose credit scores are as essential as a TikTok dance routine for snagging an apartment or loan.

The credit bureau bosses said in a joint statement, probably while having a band-aid-themed party, “We understand medical debt isn’t voluntary, so let’s not punish life’s accidents by scaring off lenders, shall we?”

Ta-da! Now, about 70% of all medical debt sent to collections won’t leave a stain on your credit sheet. The Biden-Harris crew announced their plan to defuse the medical debt ticking time bomb last year. They figured, hey, do we really need credit scores to predict who’ll fall face-first into debt when medical bills seem to drop from the sky like unwanted confetti? No one haggles on a gurney, after all.

According to the Consumer Financial Protection Bureau (CFPB), people suffer medical debt indigestion due to one-off or short-term expenses. Considering health care prices are as unpredictable as a chaotic game of “pin the dollar sign on the treatment,” it’s no surprise people skimp on healthcare for fear of being stung by the sneaky wasp of medical debt.

So, why does this sub-$500 debt erasure matter, you might ask? Well, imagine being slapped by multiple bills, and you’ll get the picture. The CFPB says medical bills make up 58% of debts in collections on people’s credit records, affecting 1 in 5 Americans. The South is suffering, low-income folks are getting kicked, and Black and Hispanic people are disproportionately more likely to owe medical money.

Last year, credit bureaus wiped clean medical collections that were paid by the consumer. Time before unpaid medical debt shows up in credit files was also extended from six months to a year, meaning people had more time to nip that nasty debt gremlin in the bud before it went on their record. Goodbye, insurance delays and billing errors!

But why stop there, you may ask? Shouldn’t all medical debt be erased from credit files as if it were an embarrassing typo? Well, the CFPB says that half of people with medical collections on their credit reports will still be haunted by them. So, the journey toward medical debt freedom continues – like a medical billing limbo: how low can they go?

According to the CFPB, people’s credit scores can jump as much as 25 points when medical debt is flushed from their records. And that’s what a credit score should be all about: a fair reflection of someone’s ability to handle credit, not of their chances of injury or illness.

So, let’s toast to fewer surprises in medical billing and more fairness in credit reporting. After all, no one chooses a trip to the ER like they’re shopping for new shoes – unless, of course, they’re rocking some hazardous high heels.