A significant number of U.S. consumers will have their medical collection debt dropped from their credit report, the nation’s biggest credit reporting bureaus announced Friday.
Equifax, TransUnion and Experian said in a joint statement they would remove nearly 70 percent of the debt after monthslong industry research showed roughly two-thirds of this type of debt is the result of either one-time or short-term medical expenses stemming from an “acute medical need,” a news release said.
Today, Experian, Equifax and TransUnion announced that they’ll no longer record most medical debt on credit reports. This is a step in the right direction, thanks to @CFPB. We'll keep fighting for consumers - from increasing transparency to preventing surprise billing and more. https://t.co/UabDxsqXFI— President Biden (@POTUS) March 18, 2022
“After two years of the Covid-19 pandemic and a detailed review of the prevalence of medical collection debt on credit reports, the NCRAs are making changes to help people to focus on their personal wellbeing and recovery,” the agencies said, referring to themselves with an abbreviation for “nationwide credit reporting agencies.”
Beginning July 1, paid medical debt will no longer be included on consumer credit reports. The credit bureaus also announced that in the first half of 2023, medical debts of less than $500 will not be added to consumer credit reports.
Additionally, the time period before unpaid medical collection debt would appear on a credit report will increase from six months to a year. This change aims to allow consumers more time to work with their insurance and medical providers to pay the debt.