On Friday, the three major credit reporting agencies said that most medical bills incurred by Americans would be removed from their credit reports by the end of the summer.
CBS News said Equifax, TransUnion, and Experian made the news that medical costs have surpassed credit card debt as the leading source of personal debt in the United States.
Lenders analyze credit reports to assess if an individual is a reasonable lending risk. A low credit score makes it more difficult to get financial products such as a mortgage or auto loan directly from bad credit lender, rent an apartment, or even find work.
The three corporations have said that they would alter their approach to medical debt collection. They include removing paid medical debt and medical collection debt under $500 off credit reports and extending the time from six to one year before unpaid medical bills in collections show on a credit record, CBS News reported.
According to the Consumer Financial Protection Bureau (CFPB), which regulates credit companies, about one in every five homes in the United States has healthcare-related debt.
The agency told CBS News that medical debt errors are widespread on credit records, and individuals often have difficulties resolving the issues.
In a March 1 report, the bureau said that it would “hold credit reporting organizations responsible” for erroneous medical debt on consumer reports and would also determine whether medical debt should be included in credit reports.
According to CBS News, Equifax, TransUnion, and Experian accounted for more than six out of ten of the CFPB’s complaints in 2021, which is the highest percentage of any other concern.