The nation’s three major credit bureaus say they are overhauling how they include medical debt in a consumer’s credit history, MarketWatch reported. The agencies said the removal will result in nearly 70% of the medical debt on Americans’ credit reports. This is a case where less is more for the financial lives of many consumers, certainly during the pandemic, advocates say — but they note the people who will remain stuck with medical debt on their reports are likely going to be those who were already the most financially vulnerable. Equifax, TransUnion and Experian announced that beginning in July they will stop including medical debts that were in collections before being paid. It will also take a year, no longer six months, before a medical debt in collections is reflected on a person’s credit report, the credit bureaus said. Some 43 million Americans have an estimated $88 billion in medical debt on their credit files, according to a Consumer Financial Protection Bureau report released earlier this month. In the first half of 2023, the three agencies said they will stop reporting medical collection debt below $500. However, the size of the average past due medical bill was $429 during 2020, according to a 2021 review in the medical journal JAMA.
