The changes will remove nearly 70% of medical debt from consumer credit reports.
from consumer credit reports, according to a statement released by the companies.
Experian, Equifax and TransUnion have been working on the changes for months, according to The Wall Street Journal. The credit reporting agencies have been under pressure from the Consumer Financial Protection Bureau to address the issues surrounding medical debt. Beginning July 1, medical debt that has been paid after it was sent to collections will be removed from credit reports. Previously, that debt, even once paid off, could remain on a consumer’s credit report for up to seven years.
Unpaid medical debts occurring after the new rules take effect this summer will not be added to credit reports until a year has passed since the debts have been sent to collections. Another change next year involves unpaid medical debts of $500 or less, which the CFPB has found is the most common category. The credit reporting agencies will remove such debts from credit reports, though the dollar amount could change, officials told The Wall Street Journal.released March 1 outlined areas of concern about the amount of medical debt appearing on consumer credit reports and how COVID-19 could cause an increase in medical debt.
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