The three biggest reporting firms will remove nearly 70 percent of medical debt in collections accounts from credit reports starting in July.
The firms — Equifax, Experian and TransUnion — will strip medical debt that was paid after it was sent to collections, according to a March 18 news release from the three firms. Even if these debts are paid off, they can be on consumer' credit reports for up to seven years, according to The Wall Street Journal.
Additionally, new unpaid medical debts will not be put on credit reports for a full year after being sent to collections, increased from six months. The firms will also remove medical collection debt of less than $500 on credit reports for the first half of 2023.
There is more than $88 billion in medical debt on consumer credit reports among people in the U.S., a March 1 Consumer Financial Protection Bureau report found. The three firms have reports on more than 200 million Americans, according to the Journal.
"Medical collections debt often arises from unforeseen medical circumstances. These changes are another step we're taking together to help people across the United States focus on their financial and personal well-being," the firms said in the release.