Three of the country's largest credit reporting agencies are removing nearly 70% of medical debt from consumer credit reports, the companies announced in a joint statement Friday.
Equifax, Experian and TransUnion will eliminate billions of dollars from the accounts of consumers who faced unexpected medical bills that they were unable to pay. The three firms said they made the move after months of research.
"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 well-being," the companies said in a joint statement. The announcement follows research from the Consumer Financial Protection Bureau showing that Americans had racked up $88 billion in medical debt on consumer credit records as of June 2021. It's the most common debt collection credit account on credit records, the CFPB said.
Medical debt can be volatile and unpredictable, and can negatively affect many financially secure consumers. Black, Hispanic, young and low-income consumers are most likely to be impacted by medical debt, the bureau said. Medical debt concerns have heightened since the Covid-19 pandemic hospitalized millions of people, and CFBP Director Rohit Chopra has been publicly critical of medical debt collections by credit reporting agencies. On March 1, Chopra said the CFPD will be"closely scrutinizing" the Big Three credit reporting agencies.
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