The Big 3, Equifax, Experian, & TransUnion Make Big Changes to Medical Debt Reporting

Wednesday, May 25, 2022      By Timothy Perry        

Equifax, Experian, and TransUnion made significant changes to the way they report (or don’t report) medical collection accounts

1.      After July 1, 2022, medical debt that was sent to collections but later paid will no longer be included on consumer credit reports.

2.     The period before unpaid medical collection debt appears on a credit report will be increased from six months to one year. The goal is to give

         more time for consumers to work with insurance companies or healthcare providers to pay, correct or otherwise address medical debt

         before it appears on credit reports.

3.     In early 2023, they will stop reporting medical debt of less than $500. This move alone is anticipated to eliminate nearly 70% of medical

        collection debt tradelines from consumer credit reports.

These moves are likely an attempt by the credit reporting industry to “self-regulate” and potentially avoid the CFPB (Consumer Financial Protection Bureau) from enacting even stronger measures. A report issued by the CFPB earlier this year titled “Medical Debt Burden in the United States” sought to determine whether medical debt should be included on credit reports under any circumstances. The newly enacted No Surprises Act will certainly be yet another consideration addressed during their decision-making process.

The CFPB’s statement that the Department of Veterans Affairs’ new medical debt collection and consumer reporting standards are “a clear and important precedent for the health care industry”, appears to have given the credit reporting industry encouragement. The industry hopes that if it acts both quickly and sufficiently enough it will avoid the CFPB implementing more onerous regulations that it would surely consider a heavy-handed move. Regardless of the industry’s motive for enacting changes, consumers burdened by medical debt that is often no fault of their own will get some much-needed relief.