Medical Debt (Photo by Sion Touhig/Getty Images)
#Roommates, your credit report holds the power to determine practically everything in your life and if you always hoped that one day some of your debt would be eliminated…you’re finally in luck. According to recent reports, three of the leading credit reporting agencies in the U.S. just announced that almost 70% of all medical debt will be officially removed from consumer credit reports.
@CNN reports, Equifax, Experian and TransUnion, three of the country’s largest credit reporting agencies, are making major moves to lessen the debt of many Americans that amounts to billions of erased debt. The credit reporting agencies confirmed that nearly 70% of medical debt will be permanently removed from consumers who racked up unexpected medical expenses. Beginning on July 1st, paid medical collection debt will no longer be included on consumer credit reports. The change comes as millions of U.S. residents had their credit scores lowered due to debts being paid after they were already sent to collections, which would remain on credit reports for seven years.
Additionally, unpaid medical debt will now show up on consumer credit reports after one year, instead of the previous time-frame of six months. Equifax, Experian and TransUnion also revealed that starting in early 2023, any medical collection debt less than $500 will no longer be included on credit reports. These changes are the result of intense research from the Consumer Financial Protection Bureau. The CFPB stated that as of June 2021, Americans accrued $88 billion in medical debt, which is the most common debt collection on credit reports.
In a joint statement, the three credit agencies said “Medical collections 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.”
Statistics also show that Black, Hispanic and low-income Americans are the most negatively impacted in regard to outstanding medical bills.
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