“Medical collection debts often result from unforeseen medical circumstances. These changes are another step we are taking together to help people across the United States focus on their financial and personal well-being,” the companies said. in a joint statement.
Medical debt can be volatile and unpredictable, and can affect many financially well-off consumers. Black, Hispanic, young and low-income consumers are most likely to be affected by medical debt, the bureau said.
“We expect them to take seriously their role as major players in the credit reporting system, a system whose integrity and accuracy can determine the financial future of hundreds of millions of people. “, said Chopra.
Effective July 1, paid medical collection debts will no longer be included in consumer credit reports. Millions of Americans previously had lowered credit scores because debts paid after being sent to collections could show up on credit reports for up to seven years.
Further changes are expected. It will now take one month for unpaid medical collection debt to appear on a consumer’s report, instead of six months, the previous norm.
The three companies also said that beginning in the first half of 2023, medical collection debts under $500 will no longer be included in credit reports.