Many Americans have medical debt on their credit reports—even after a series of recent moves by the three major credit bureaus to remove many medical bills from those reports.
A new study from the Consumer Financial Protection Bureau, or CFPB, shows that despite reporting changes made by Equifax, Experian and TransUnion since 2022, medical bills totaling $49 billion still appear on 15 million people’s credit reports.
The report also reveals that the percentage of consumers with medical debt on their credit records tumbled from 14% in March 2022 to 5% in June 2023.
“Experian, Equifax, and TransUnion took steps to remove many medical bills in part because of the recognition that they hold little predictive value,” CFPB director Rohit Chopra said in a statement. “Findings from our latest research reveal the impact of these changes and the need for further reforms.”
After a CFPB study in early 2022 uncovered a total of $88 billion in medical bills on credit reports, the three major credit bureaus pledged to change how they report such debt.
The CFPB directed debt collectors and credit reporting companies to refrain from reporting invalid medical debt. Equifax, Experian, and TransUnion removed paid medical debts and those less than a year old from credit reports. They also eliminated the reporting of medical collections under $500.
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Credit Reporting Changes Favor Wealthier Americans
The medical debt reporting changes have helped some groups of people more than others, according to the CFPB report.
Nationally, reported medical debt declined by an average of 38% between March 2022 and June 2023, although the extent of this reduction varied significantly by location.
For example, in Nevada, medical debt balances on credit reports dropped by just 4%. In contrast, residents of Utah saw a 78% decrease.
Certain demographic groups are disproportionately affected. Residents of predominantly Black or Latino communities are more likely to have medical debt listed on their credit reports.
Overall, consumers who still have medical bills on their credit reports tend to have lower credit scores and live in areas where residents have lower incomes. These consumers were less likely to be helped by the reporting adjustments than higher-income and older Americans. The CFPB had predicted this uneven benefit in its 2022 report.
How To Keep Erroneous Medical Debt Off Your Credit Report
Here are steps you can take to reduce or eliminate medical debt on your credit report:
- Check credit reports regularly. To review your credit history, use the free online credit reports provided by Equifax, Experian, and TransUnion at AnnualCreditReport.com.
- Identify discrepancies. Look for any outstanding medical bills or discrepancies, such as medical collections under $500, paid medical collections or collections less than a year old.
- Dispute errors. If you find discrepancies, dispute this information with the credit reporting company to correct inaccuracies on your credit report.
- Submit a complaint to the CFPB. If you’re having trouble resolving medical debt concerns or disputing errors, you can submit a complaint to the CFPB.
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