**Most Medical Debts to Be Removed From Consumers’ Credit Reports**
**Equifax, Experian and TransUnion are making sweeping changes to how they report medical debt in collections beginning this summer**
**by AnnaMaria Andriotis, The Wall Street Journal, 3/18/2022**
**The biggest credit-reporting firms will strip tens of billions of dollars in medical debt from consumers’ credit reports, erasing a black mark that makes it harder for millions of Americans to borrow.... Beginning in July, the companies will remove medical debt that was paid after it was sent to collections. These debts can stick around on a consumer’s credit report for up to seven years, even if they are paid off. New unpaid medical debts won’t get added to credit reports for a full year after being sent to collections.**
**The firms are also planning to remove unpaid medical debts of less than $500 in the first half of next year. ...**
**The Consumer Financial Protection Bureau estimates that some $88 billion in medical bills sits on 43 million credit reports. The three credit-reporting firms maintain reports on more than 200 million people in the U.S....** [end quote]
This is a HUGE change that will help millions of people.
Covid-19 has infected 80 million in the U.S. About 4.5 million were hospitalized. Although the Covid vaccinations were free, medical care was not.
Many people have health insurance, but even the insured often have high deductibles and copays they can’t afford. Two-thirds of people who file for bankruptcy cite medical issues as a key contributor to their financial downfall.
Note that the change in policy will be for medical debt that is paid. It doesn’t include unpaid medical debt.
Even so, removing the burden of previous medical debt from credit reports will improve many consumers’ ability to borrow at lower rates. This will be a positive for the Macro economy.