On March 18th, Equifax, Experian and TransUnion have announced they will collectively remove nearly 70% of medical collection debt tradelines from credit reports.
Starting July 1, paid medical collection debt will no longer be included on consumer credit reports. In addition, the time period before unpaid medical collection debt would appear on a consumer’s report will be increased from 6 months to one year, offering consumers more time to address their debt with insurance and healthcare providers before it is reported.
In the first half of 2023, Equifax, Experian and TransUnion will also no longer include medical collection debt under at least $500.
"Medical collections debt often arises from unforeseen medical circumstances. These changes are another step we’re taking together to help people across the United States focus on their financial and personal wellbeing," Equifax CEO Mark Begor, Experian CEO Brian Cassin and TransUnion CEO Chris Cartwright said in a joint statement Friday. "As an industry, we remain committed to helping drive fair and affordable access to credit for all consumers."
The Consumer Financial Protection Bureau estimates that there was at least $88 billion in medical debt reported on 43 million credit reports as of June 2021.
The majority of medical debt collection tradelines on consumer credit reports are under $500, although many people with medical debt have multiple medical collections.
Past-due medical debt can lower a person's credit score, potentially reducing their access to credit and making it harder to find a home or a job.
Black and Hispanic people, and young adults and low-income individuals of all races and ethnicities, are more likely to have higher rates of medical debt than the general population. Older adults and veterans are also heavily impacted by medical debt. Medical debt is more prevalent in the southeastern and southwestern United States.
In recent years, credit-reporting firms have agreed to remove debts that did not arise from a contract or agreement to pay from credit reports, such as library fees or fines, parking tickets, speeding tickets, and court fees or fines. In 2017, they also agreed to implement changes to start removing civil judgment and tax lien data from credit reports.
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