Equifax, Experian, and TransUnion to make changes to medical collection debt reporting
Beginning this summer, that applicant seeking auto financing might appear a little more worthy of being extended a contract because of upcoming changes by the three nationwide credit reporting agencies.
On Friday, Equifax, Experian and TransUnion announced significant changes to medical collection debt reporting to support consumers faced with unexpected medical bills.
The bureau said in a joint news release that these measures will remove nearly 70% of medical collection debt tradelines from consumer credit reports, a step taken after months of industry research.
According to the Kaiser Family Foundation, two-thirds of medical debts are the result of a one-time or short-term medical expense arising from an acute medical need.
After two years of the COVID-19 pandemic and a detailed review of the prevalence of medical collection debt on credit reports, Equifax, Experian and TransUnion said they are making changes to help people to focus on their personal wellbeing and recovery.
Effective July 1, the bureaus indicated paid medical collection debt will no longer be included on consumer credit reports.
In addition, Equifax, Experian and TransUnion said the time period before unpaid medical collection debt would appear on a consumer's report will be increased from 6 months to one year, giving consumers more time to work with insurance and/or healthcare providers to address their debt before it is reported on their credit file.
In the first half of 2023, Equifax, Experian and TransUnion also said they also no longer will include medical collection debt under at least $500 on credit reports.
The companies’ chief executive officer provided a joint statement on the decision to change medical collection debt reporting.
Mark Begor of Equifax, Brian Cassin of Experian and Chris Cartwright of TransUnion said, “Medical collection 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.
“As an industry we remain committed to helping drive fair and affordable access to credit for all consumers,” they added.