“The share of Americans with unpaid medical bills tainting their credit files has fallen in the two years since the major credit reporting agencies — Equifax, Experian and TransUnion — changed how that debt was reported, a federal watchdog agency said this week,” Ann Carrns writes over at The New York Times. “But even with the changes, some 15 million people — many of them living in low-income communities and in the South — still have medical bills in their credit files, the Consumer Financial Protection Bureau reported. Rohit Chopra, the bureau’s director, said in a statement that ‘further reforms’ were needed to scour medical debt from credit histories. The bureau is considering a rule to ban medical debt from consumer credit files. The bureau estimated in a 2022 report that well over half the debt that appeared on credit reports as being in collection was medical debt. Having unpaid medical bills on your credit report can make it hard to qualify for loans and credit cards, get cellphone service, rent an apartment or even secure a job, since landlords and employers also check applicants’ credit history. Yet the bureau’s research suggests that medical debt is a less useful measure of a borrower’s creditworthiness than other types of debt, largely because of the complexities of the American health care system. People can incur medical bills unexpectedly, and many think that their health insurance will cover the costs. They often must contact insurers, hospitals or doctors and may end up haggling over their correct share of the bill. And the consumer bureau previously found that medical collection debt reported to the credit bureaus was ‘plagued by inaccuracies.'” Ann Carrns, “Medical Debt Shows Up Less Often on Credit Reports,” The New York Times.
