Explain medical debt with 100-word statement

Add it to your credit report, but don't forget to remove it

Question for the CreditCards.com expert

Dear Credit Wise,
I have one 30-day late payment to the mortgage company because of medical disabilities. Will I be able to get it removed? -- Sharon

Answer for the CreditCards.com expert

Dear Sharon,
I am sorry to hear of your medical problems. I hope things are better for you now. It seems you only have one late payment to your mortgage company, so I think you did a good job during a tough time.

Unfortunately removing bad marks from your credit report is not something you can do if the information listed is correct. In this case, you apparently did pay your mortgage 30 days late and your mortgage company did report that late payment. Those are facts and they cannot be changed. 

Debt that occurs due to medical reasons is increasingly being recognized as a special kind of debt that deserves gentler treatment. The Consumer Financial Protection Bureau and FICO are taking steps to soften medical debt's impact on credit scores. Those impending changes, unfortunately, are too late to benefit you, so you need to work with the tools at hand.

One such tool is the 100-word statement. The Fair Credit Reporting Act gives you the right to add such a statement to your credit reports. While this does not affect your score one way or the other, it does give you the option of explaining the reason for your late payment. This information could be useful to prospective lenders who review your credit report. You should know, though, that in today's world most lending decisions are made by a computer, who won't be reading your statement. 

While you do seem to have a legitimate excuse for your late payment, I must caution you that if you do add a statement, it could draw more attention to the late payment. Still, a late mortgage payment is a fairly large ding, so it might be worth it to go ahead if you are concerned about someone accessing your reports in the near future.

Time is the real issue here and the more time goes by, the better. In the months immediately following a late payment the delinquency looks worse. But as time goes by and you make your mortgage payments on time, the late payment will have a lesser impact on your score. So if you do decide to place a statement on your reports, don't leave it on there forever. This late payment will eventually become less of a factor and will in fact drop off after a few years. At that point, you don't want a statement on your report that says you were ever late, no matter what the reason was for the delinquency.

Keep an eye on your credit reports by accessing annualcreditreport.com on a regular basis. You can get all of your reports free once a year. Time is really all you need to correct this problem, as long as you are able to make all of your payments on time, every time from now on.  Doing so will insure your credit score and reports are reflective of what you want.

Be wise with your credit!

See related: How to add a 100-word statement to your credit, Sample 100-word statements to add your credit

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Updated: 01-20-2018