Medical bills have become a major financial crisis for millions of Americans. Now, the top three credit reporting agencies plan to waive most medical loans from consumer credit reports starting this summer.
Equifax, Experian and TransUnion on Friday Said That they are making a number of changes to the way medical loans are handled on credit reports, which is a record for consumer borrowing and repaying. Lenders use credit reports to determine if a consumer is a good condition for a loan, which means that a poor credit score can make it difficult to obtain a mortgage, car loan or other product. Credit reports can also affect people’s ability to rent apartments and get jobs.
The announcement comes as federal regulators and consumer advocates, along with the Consumer Financial Protection Bureau, are scrutinizing medical loans earlier this month. criticize The country’s medical billing system for failed customers. The agency said errors in medical reports on credit reports are common, and consumers often have difficulty resolving issues.
According to the CFPB, approximately 1 in 5 American households have health care debt.
The three top credit reporting agencies said they were making changes to the way medical debt was handled. These include:
- Paid medical loans will be excluded from consumer credit reports.
- The period before the non-performing medical loans appear in the receipts on the credit report will be increased from 6 months to 1 year.
- The credit bureau will reduce the medical recovery debt from credit reports to less than $ 500.
“Medical deposit debt often arises from unforeseen medical conditions,” said Mark W. Begur, CEO of Equifax. Brian Casein, CEO Veteran; And Chris Cartwright, CEO of Trans Union, in a joint statement.
He added that the changes would “allow people across the United States to focus on their financial and personal health.”
Government on the case
Ted Rasman, a senior industry analyst at Bankrett, said in an email that removing medical bills from people’s credit reports would increase their credit score. “The fact that new unpaid medical supplies will not be reported for at least a year is also a user-friendly change that will give patients more time to settle their bills with their insurance company.” Which, of course, made the video an overnight sensation.
The CFPB, created in the wake of the 2008 financial crisis, oversees credit agencies. Its March 1 report on medical loans warns that it plans to “hold credit reporting agencies accountable” for incorrect medical loans based on consumer reports. The agency also said it plans to determine whether credit reporting should include free medical billing data.
According to Americans, the three major credit reporting agencies complain more than any other subject. Complaints analysis By CFPB. The agency said more than six of the 10 complaints CFPB received in 2021 were related to Equifax, Experian or TransUnion.
Congress tried last year to address the issue of runway medical bills.That protects people with health insurance from being billed for emergency medical care outside the insurer’s network. Patients are still responsible for any deductions and copies they normally have to pay under their plan, but they can only be billed at their plan’s network rate.