Most Medical Debts To Be Removed From Credit Reports

Three of the top credit reporting agencies in the country announced they will be removing most medical debt from consumers' credit reports. The changes will remove nearly 70% of medical debt in collections from peoples' credit reports.

Equifax, Experian, and TransUnion released a joint statement saying that starting on July 1, paid medical collection debt will no longer be listed. In addition, they will double the amount of time before unpaid medical debt shows up on peoples' credit reports.

Currently, consumers have six months to settle their unpaid medical debt before it shows up on their credit report. Under the new reporting guidelines, they will now have one year to work with hospitals and insurance companies to resolve the debt.

The Consumer Financial Protection Bureau said that roughly 20% of Americans have unpaid medical debt and that "43 medical collections tradelines appear on 43 million credit reports." In addition, a study published in the Journal of the American Medical Association found that from January 2009 to June 2020, medical bills were the largest source of personal debt in the United States, with a record $140 billion owed in 2020.

"Medical collections debt often arises from unforeseen medical circumstances. These changes are another step we're taking together to help people across the United States focus on their financial and personal wellbeing," said Mark W. Begor, CEO Equifax; Brian Cassin, CEO Experian; and Chris Cartwright, CEO TransUnion. "As an industry, we remain committed to helping drive fair and affordable access to credit for all consumers."