New Medical Debt Reporting Rules by Top Credit Agencies

Earlier this month, top credit agencies announced their decision to no longer include medical debt on credit reports. This announcement follows a report from the Consumer Financial Protection Bureau (CFPB) that highlighted the government’s growing interest in reducing the financial burden on individuals struggling with medical bills.

The three largest national credit reporting agencies (NCRAs)—Experian, Equifax, and TransUnion—have planned significant changes in their medical debt reporting. Starting July 1, consumers will see paid medical collection debt excluded from credit reports. This debt currently can appear on reports for up to seven years. Additionally, people will have one year to settle their medical bills before unpaid medical debt is shown on their credit reports. This is a shift from the previous six-month window. Moreover, from mid-2023, medical debt under $500 will no longer appear on credit reports.

This news has been welcomed as it will eliminate 70% of medical debt from credit reports, according to the NCRAs. However, there is a lack of specific details. For instance, it is not clear how the $500 threshold will be determined. Will it be calculated as a single bill or a series of bills for one health event? More specifics from the credit agencies are awaited.

While removing medical debt from credit reports is a positive step, it does not address the medical debt crisis faced by millions. Penalizing credit scores due to medical debt adds unnecessary stress to an already challenging situation. Even though medical debt will not appear on credit reports, it will still pose challenges. Debt collection calls and piling bills do not cease just because the debt is not included in credit reports. Medical debt significantly impacts low-income individuals and people of color.

Medical debt also remains complex in other ways. During health crises, people often rely on credit cards and high-interest loans to cover medical expenses. Addressing medical debt isn’t about ignoring it or hiding it in other forms of debt. It is about tackling the root cause and ensuring that people do not compromise their health or economic stability to access healthcare.

We understand how crucial it is to have support when dealing with medical debt. Our work aligns with these recent changes in credit reporting rules. We help individuals navigate the maze of medical debt, advocating for their financial health and peace of mind. Through our services, we aim to alleviate the financial strain of medical bills, enabling people to focus on their well-being without the burden of overwhelming debt.