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Changes in Reporting Medical Debt on Credit Reports to Take Effect July 1st

Beginning July 1st, changes will be made on how the three main credit bureaus report medical debt on credit reports. A report by the Consumer Financial Protection Bureau shows medical debt is less predictive of future repayment than reporting on traditional credit obligations.

Shortly after the report was released last month, the three main nationwide credit bureaus, Equifax, TransUnion, and Experian announced changes to credit reporting that will remove nearly 70% of medical collection debt from credit reports. The primary changes include no longer including medical debt that was paid after it was sent to collections on credit reports; waiting at least one year before unpaid medical collection debt appears on a credit report; and only reporting medical debt of over $500.

The report found roughly 20 percent of U.S. households have medical debt. The report also found the U.S. healthcare system is supported by a billing, payments and collections credit reporting infrastructure where mistakes are common and often difficult for patients to resolve.

It is hoped the changed will help Americans overcome financial challenges created by past medical debts and get loans or credit in the future.



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