HomeHealthMost medical debt will be removed from consumer credit reports.

Most medical debt will be removed from consumer credit reports.


Medical bills have become a source of major financial problems for millions of Americans, amounting to largest source of personal debt in the US. Now, the three major credit reporting agencies plan to remove most medical debt from consumers’ credit reports beginning this summer.

Equifax, Experian and TransUnion on Friday said They’re making a number of changes to the way they handle medical debt in credit reports, which is a record of a consumer’s loans and repayments. Lenders use credit reports to determine if a consumer is a good bet for a loan, which means a bad credit score It can make it hard to get a mortgage, car loan, or other products. Credit reports can also affect a person’s ability to rent an apartment and even get a job.

The announcement comes as federal regulators and consumer advocates take a closer look at the issue of medical debt, with the Consumer Financial Protection Bureau earlier this month. criticizing the nation’s medical billing system for troubled consumers. Errors related to medical debt are common on credit reports, and consumers often have a hard time fixing problems, the agency said.

About 1 in 5 American households has health care-related debt, according to the CFPB.

The three major credit reporting agencies said they are making several changes to the way they handle medical debt. They include:

  • Paid medical debt will be removed from consumers’ credit reports
  • The period of time before unpaid medical debts in collections appear on a credit report will increase from 6 months to 1 year
  • Credit bureaus will remove medical collection debt under $500 from credit reports.

“Medical collection debt often arises from unforeseen medical circumstances,” said Mark W. Begor, CEO of Equifax; Brian Cassin, CEO of Experian; and Chris Cartwright, CEO of TransUnion, in a joint statement.

The changes will allow “people across the United States to focus on their financial and personal well-being,” they added.

government on the case

Ted Rossman, senior industry analyst at Bankrate, said in an email that removing paid medical bills from people’s credit reports will improve their credit scores. “The fact that new unpaid medical bills go unreported for at least a year is also a consumer-friendly change that will give patients more time to resolve these bills with their insurance company, which is often a frustrating and time-consuming task. process,” he added.

The CFPB, created in the wake of the 2008 financial crisis, oversees the credit bureaus. His March 1 report on medical debt warned that he planned to “hold credit reporting agencies accountable” for inaccurate medical debt on consumer reports. The agency also said it planned to determine whether unpaid medical billing data should be included in credit reports.

Americans complain about the Big Three credit reporting agencies more than any other topic, according to analysis of complaints by CFPB. More than 6 in 10 complaints received by the CFPB in 2021 were related to Equifax, Experian or TransUnion, the agency said.

Last year, Congress tried to address the issue of track medical bills pass the “Law without surprises”, that protects people with health insurance from being billed for emergency medical care outside of an insurer’s network. Patients are still responsible for deductibles and copays they would normally have to pay under their plan, but may only be billed at their plan’s in-network rate.



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