Equifax, Experian and TransUnion have removed medical collections debt with an initial reported balance of under $500 from U.S. consumer credit reports, the three credit reporting agencies said Tuesday (April 11) in a joint press release.
“We understand that medical debt is generally not taken on voluntarily and we are committed to continuously evolving credit reporting to support greater and responsible access to credit and mainstream financial services,” Equifax CEO Mark W. Begor, Experian CEO Brian Cassin and TransUnion CEO Chris Cartwright said in the release. “We believe that the removal of medical collection debt with an initial reported balance of under $500 from U.S. consumer credit reports will have a positive impact on people’s personal and financial well-being.”
This is the latest change made as part of a commitment announced by the three credit reporting agencies in March 2022.
In two changes that took effect July 1, 2022, paid medical debt is no longer included on consumer credit reports, and consumers are given a year — rather than the previous limit of six months — to address unpaid medical debt before it appears on their report.
With the most recent change — which the agencies had said would take effect in the first half of this year — nearly 70% of the total medical collection debt tradelines reported to the agencies have been removed from consumer files, according to the Tuesday press release.
The effort by the credit reporting firms to change how they report outstanding medical liabilities was undertaken in March 2022 in part to satisfy the Consumer Financial Protection Bureau (CFPB).
CFPB Director Rohit Chopra said earlier in March 2022 that he would hold credit reporting agencies accountable for dragging their feet on acting against companies that report inaccurate medical debt.
The CFPB reported in February that medical collection tradelines are still a majority of all collections on consumers’ credit reports — at 57%. And that’s even with the fact that, as the CFPB said, debt collectors “are moving away” from reporting (or furnishing) medical bills to credit reporting companies.
Courtesy of PYMNTS.com