Financial Counseling Certification Practice Exam 2025 – Complete Prep Guide

Question: 1 / 400

If a medical bill is paid by an insurance company, must the CRAs remove the item from a credit report?

True

When a medical bill is paid by an insurance company, the item should be removed from a credit report. This is in accordance with regulations aimed at protecting consumers from the negative impact of unpaid medical debt on their credit scores. Under the Fair Credit Reporting Act, if a debt is settled or paid, it should be updated on the credit report to reflect that the balance is zero or marked as paid.

Moreover, the Credit Reporting Agencies (CRAs) have a responsibility to ensure that credit reports are accurate and up-to-date. The presence of a medical bill that has been paid could mislead potential lenders, and it is crucial for consumers to have a credit report that accurately represents their financial standing. Thus, once a medical bill is settled by insurance, CRAs are obligated to remove or update the information to indicate that it has been paid.

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