Crypto investors need to pay taxes on virtual investments
Academy Awards nominations for 2021 movies often violent, unimaginative with some very dark themes

Credit bureaus to remove most medical debt from credit reports

Who-had-medical-debt-in-united-states-figure-1

Equifax, Experian, and TransUnion, the three major credit bureaus, are changing how they’ll treat the reporting of medical debt. The new actions will result in nearly 70 percent of medical debt in collections being removed from credit reports.

Paid medical debt will be erased from consumer reports and any new medical debt won’t be included in credit reports until a year, rather than the current six months, after the debt is given over to collection agencies.

Beginning in 2023, owed medical debt of less than $500 won’t be included in credit reports.

The Consumer Financial Protection Bureau recently issued a report that described the widespread problem of medical debt for American families.

About 20 percent of American households say they have medical debt, according to the report. As of the second quarter of 2021, 58 percent of bills in collections and on credit reports were medical bills.

These debts can remain on credit reports for seven years, making it less likely for affected individuals to get loans, buy a home, or in some cases, to get a job.

“We have known for years that medical debt doesn’t predict credit defaults, nor does it accurately predict a person’s desire and willingness to pay off loans,” said Patricia Kelmar, health care campaigns director for U.S. PIRG, a public interest organization. “After feeling the heat from the CFPB and its new director, Rohit Chopra, the credit bureaus appear to have finally seen the light and are course-correcting.”

Delaying medical debt reporting by a year, wiping paid medical debt from credit reports, and ending the inclusion of medical debt under $500 are all welcome relief that can’t come soon enough, Kelmar said.

However, she said credit bureaus should stop reporting debt arising from medically necessary procedures altogether.

“We need a fair credit system that doesn’t penalize people for life events they can’t control like getting sick,” Kelmar said.

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been posted. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Your Information

(Name and email address are required. Email address will not be displayed with the comment.)