Credit Bureaus Will No Longer Report Most Medical Debt

In mid-March, all three major credit bureaus—Equifax, Experian, and TransUnion—announced they would no longer include most medical collection debt on people’s credit reports. This is a major change that should have everyone checking their credit reports.

According to the Washington Post, the credit bureaus will be taking steps to change how they report medical debt over the next year. First, as of July 1, they will no longer report about 70% of medical collection debt. And of the debt they do report, they will give people an additional 6-months before reports appear in their records, so they have more time to resolve the issue.

In mid-2023, they will stop including medical debt of less than $500.

The bureaus announced these changes following the recent release of a new report from the Consumer Financial Protection Bureau (CFPB). In that report, the CFPB revealed that half of all debt reports on people’s credit reports are related to collection efforts for medical and hospital bills. And this adverse reporting impacts one-fifth of the 220 million consumers who have at least one credit report with a bureau.

What makes this even worse is that most debts are for small amounts. The median medical debt was $207, a smaller amount than non-medical debt. At the same time, medical debts often arose out of confusion over what insurance was or was not covering. Most medical debtors paid other bills on time.

Then to compound the problem, medical debt is frequently sold to third-party collectors—who are known for harassing debtors but aren’t known for providing consistent or accurate information to the credit bureaus.

The result has been that millions of consumers have been getting lower credit scores, although there is little evidence medical debt accurately suggests if someone is a credit risk.

Given these findings, it is hard to justify including medical debt on credit reports, and it’s heartening to see the bureaus responding.

But this also means consumers should be looking with even more care at their credit bureaus for changes, errors, and other inaccurate reporting.

If you identify any information on your credit report that shouldn’t be there, from errors of your data to someone else’s information in your credit report, contact an attorney who specializes in representing clients like you—someone who can help you repair your record and obtain compensation for any damages you sustained.