Experian, Equifax and Trans Union have agreed to change the way that collections for medical debt is reported on consumers’ credit reports. Medical collections have always been considered by many not to be a very good indication of how well a consumer manages his or her money. Medical debt is often unexpected and therefore hard to prepare for. And, because insurance companies act the way that they do, often times medical debt goes to collection before the consumer even knows what he or she actually owes.
The new changes are:
• Paid medical collection debt will no longer be included on consumer credit reports, as of July 1, 2022.
• The time period before unpaid medical collection debt will appear on a consumer’s report will be increased from six months to one year, also effective July 1, 2022. This change gives consumers more time to work with insurance and/or healthcare providers to address medical collection debt before it appears on credit reports.
• Medical debt collection accounts under at least $500 will no longer be included on consumer credit reports. This goes into effect the first half of 2023.
These are welcome changes in my opinion.