medical collection debt

70% of Medical Collection Debt Consumer Credit

Equifax, Experian, and TransUnion will adjust their medical collection debt reporting to reduce the debt displayed on consumer credit reports.

Three nationwide credit reporting agencies have announced that they will remove nearly 70 percent of medical collection debt tradelines from consumer credit reports to help ease the burden accompanying past-due medical bills.

Equifax, Experian, and TransUnion will also make additional adjustments to their medical debt collection reporting. Starting July 1, 2022, the credit reporting agencies will no longer include paid medical collection debt on consumer credit reports.

Companies plan to increase the time before overdue medical debts appear on credit reports from 6 to 12 months. This gives consumers more time to resolve debts with healthcare providers or insurers.

Credit Reporting

Starting in H1 2023, credit reporting agencies won’t report past-due medical debts under $500.

According to Kaiser Family Foundation data cited in the press release, two-thirds of medical debts result from one-time or short-term medical expenses stemming from acute medical care.

After reviewing medical debt prevalence on credit reports, Equifax, Experian, and TransUnion announced these medical debt collection reporting adjustments. Moreover, the companies said the move would help relieve some of the financial and personal stress consumers faced during the COVID-19 pandemic.

“Medical collection 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.” Mark W. Begor, chief executive officer of Equifax; Brian Cassin, chief executive officer of Experian; and Chris Cartwright, chief executive officer of TransUnion, said in a joint statement. “As an industry, we remain committed to helping drive fair and affordable access to credit for all consumers.”

This decision from the country’s three largest credit reporting agencies to limit medical debt collection inclusion on consumer credit reports comes shortly after recent data revealed the severity of the situation.

Consumer Financial Protection Bureau

In 2021, consumer credit reports disclosed around $88 billion in past-due medical debt, a February 2022 report from the Consumer Financial Protection Bureau (CFPB) found. About 43 million credit reports showed medical debt collections, with most tradelines under $500. In addition, 20 percent of households reported having medical debt.

Medical debt on credit reports can harm credit scores and create roadblocks to obtaining credit, employment, or housing. It could also push consumers to avoid medical care for fear of furthering their debt.

In particular, younger Americans have faced the brunt of past-due medical debt. For example, around half of Millennial and Generation Z individuals reported that their medical debt hurt their credit score and caused them to cut back on certain spending habits, a survey from found.


Data from Discover Personal Loans revealed that most consumers faced more than $2,000 of medical debt in 2021.

Removing medical debt from credit reports could help individuals who are struggling financially. Medical debt may not predict payment issues like other debt types. Billing mistakes can cause medical debt inaccuracies.

(Note from your Revenue Cycle Management partner at ebix, Inc. We are always at the forefront of industry insights and believe this announcement from Victoria Bailey, March 2022 of, will interest you.)

Leave a Reply

Your email address will not be published. Required fields are marked *