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Equifax, Experian, TransUnion to remove majority of medical debts from consumers' credit reports
FOX Business Flash top headlines for March 18
Here are your FOX Business Flash top headlines for March 18.
Equifax, Experian and TransUnion have announced they will collectively remove nearly 70% of medical collection debt tradelines from credit reports.
UNPAID MEDICAL BILLS ACCOUNT FOR 58% OF DEBT IN COLLECTIONS: CFPB REPORT
Starting July 1, paid medical collection debt will no longer be included on consumer credit reports. In addition, the time period before unpaid medical collection debt would appear on a consumer’s report will be increased from 6 months to one year, offering consumers more time to address their debt with insurance and healthcare providers before it is reported.
In the first half of 2023, Equifax, Experian and TransUnion will also no longer include medical collection debt under at least $500.
The three credit-reporting firms cover more than 1.6 billion credit accounts for over 200 million adults every month.
"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," Equifax CEO Mark Begor, Experian CEO Brian Cassin and TransUnion CEO Chris Cartwright said in a joint statement Friday. "As an industry, we remain committed to helping drive fair and affordable access to credit for all consumers."
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The Consumer Financial Protection Bureau estimates that there was at least $88 billion in medical debt sitting on 43 million credit reports as of June 2021.
"The total amount of medical debt in collections in the U.S. is likely higher, since not all medical debts in collections are furnished to consumer reporting companies," the CFPB noted in its "Medical Debt in the United States" report for February 2022.
The majority of medical debt collection tradelines on consumer credit reports are under $500, although many people with medical debt have multiple medical collections.