Credit reporting agencies will wipe out most medical debt

Equifox (EFX), Experian (XPGF) And Transunion (True) Billions of dollars will be removed from the accounts of consumers who face unexpected medical bills that they cannot pay. All three companies said they made the move after several months of research.

“Medicare debt often arises from unforeseen medical circumstances. These changes are another step we are taking together to help people across the United States focus on their financial and personal well-being,” the statement said.

The announcement follows Research As of June 2021, the Consumer Protection Bureau shows that Americans have $ 88 billion in medical debt in consumer credit records. It is the most common debt collection credit account in credit records, CFPB said.

Medical credit can be volatile, unpredictable, and even negative Affects many financially secure consumers. Black, Hispanic, young and low-income consumers are more likely to be affected by medical debt, the bureau said.

Medical debt concerns have increased in the wake of the Govt-19 epidemic Millions of people hospitalizedAnd CFBP Director Rohit Chopra Publicly review Medical debt collection through credit reporting agencies. On March 1, Chopra said the CFPD would “thoroughly inspect” the three major credit reporting agencies.

“We expect them to take seriously their role as key players in the credit reporting system – a system that integrity and accuracy will determine the financial future of hundreds of millions of people,” Chopra said.

From July 1, paid medical collections will no longer be included in consumer credit statements. Millions of Americans have lowered their credit score because debts paid out after they have been shipped for recovery appear in credit statements for up to seven years.

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Further changes are expected. The unpaid medical collection credit is one year from appearing in the consumer statement, instead of six months, the previous standard.

All three companies have stated that starting in the first half of 2023, medical collections of less than $ 500 will no longer be included in credit statements.

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