Approximately
15
million
Americans
continue
to
grapple
with
medical
debt on
their
credit
reports,
despite
reforms
implemented
by


Equifax,


Experian
and


TransUnion
in
March
2022,
the


Consumer
Financial
Protection
Bureau
(CFPB)
revealed
in
a

study
published
Monday.

As
of
June
2023,
about
5%
of
Americans
had
unpaid
medical
bills
on
their
credit
reports, 
down
from
14%
in
March
2022.
Older
Americans
saw
the
largest
improvement,
as
only
3%
of
them
had
medical
bills
on
their
credit
reports
in
June
2023,
compared
to
8.4%
in
March
2022. 

But
the
effectiveness
of
the
changes
made
by
the
three
major
credit
reporting
agencies
appears
weaker
for
lower-income
communities
and
individuals
residing
in
Southern
states.
On
average,
people
living
in
the
South
continue
to
have
the
most
medical
bills
in
collections
and
have the
largest
dollar
amounts
outstanding.

Collectively,
Americans
have
more
than
$49
billion
in
medical
debt
in
collections.
This
amount
has
declined,
however,
after
a

previous
CFPB
study
found
an
estimated
$88
billion
in
medical
bills
on
consumer
credit
reports.

Medical
debts
have
had
significant
long-term
financial
consequences
on
consumers
as
paid
debts
that
are
sent
to
collections
remain
as
red
marks
on
their
reports.
This
often
limits
their
options
for
housing,
loans
and
credit
cards.

Traditionally,
health
care
debt
held
less
weight
than
other
types
of
debt
and
typically
didn’t
impact
credit
scores.
In
most
cases,
medical
providers
refrained
from
reporting
payment
activity,
or
lack
thereof,
to
the
credit
bureaus.
In
general,
unpaid
medical
bills
went
into
collections
anywhere
between
60
to
180
days
after
becoming
delinquent,
depending
on
the
provider.

Since
March
2022,
however,
the
three
nationwide

credit
reporting
companies
have
made
significant
changes.
They
removed
all
unpaid
medical
debt
with
an
initial
balance
below
$500
from
credit
reports.
The
time
before
medical
bills
in
collections
can
appear
on
credit
reports
was
extended
from
180
days
to
one
year.
And
the
companies
ceased
reporting
medical
bills
that
have been
resolved
after
going
into
collections. 

The
average
medical
balance
on
credit
reports
increased
from
March
2022
to
June
2023,
going
from
$2,000
to
more
than
$3,100
as
the
credit
reporting
changes
primarily
targeted
smaller
balances.
While
many
bills
were
removed,
a
significant
portion
of
medical
collections
balances
still
linger
on
credit
reports.

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