Consumer credit reports will no longer carry most medical debt.

• The nation's largest credit reporting agencies announced on Friday that a significant number of U.S. consumers will have their medical debt removed from their credit reports.
• Nearly 70% of medical collection debt accounts will be removed from consumer credit reports, as stated by Equifax, Experian, and TransUnion following extensive market research.
• The changes will start to take place this summer.

The nation's largest credit reporting agencies announced on Friday that a significant number of U.S. consumers will have their medical debt removed from their credit reports.

Nearly 70% of medical collection debt accounts will be removed from consumer credit reports after months of market research, according to a joint statement by TransUnion. The changes will begin this summer.

The NCRAs (nationwide credit reporting agencies) are making changes to help people focus on their personal wellbeing and recovery after two years of the COVID-19 pandemic and a detailed review of the prevalence of medical collection debt on credit reports.

Effective July 1, medical debts that were previously sent to debt collectors and paid off will no longer be included on consumer credit reports. Prior to this change, debts that were paid after being sent to collections could be included on credit reports for seven years. Now, consumers will have a year before unpaid medical collection debt appears on credit reports after being sent to collections, an increase from the current six months. The agencies stated that this change will provide individuals with more time to work with their insurance or healthcare providers.

In the first half of 2023, Equifax, Experian, and TransUnion will stop including medical debts below $500 on credit reports.

Missing payments due to unpredictable medical debt can negatively impact even the most financially responsible individuals, ultimately lowering their credit scores and limiting their access to favorable credit or loan terms.

The Consumer Financial Protection Bureau's February report revealed that as of June 2021, there was $88 billion in medical debt on consumer credit records. The bureau also stated that most medical debts in collection were under $500.

The report stated that medical debt is more prevalent among Black and Hispanic consumers, young adults, and low-income individuals, with older adults and veterans also being heavily affected.