Consumer Credit Reporting Agencies
Equifax, Experian, and TransUnion have announced that effective July 1, 2022, they will no longer include medical debt that was paid after it was sent to collections on consumer credit reports. In addition, the time period before unpaid medical collection debt appears on a credit report will be increased from 6 months to one year.
Also, the companies announced that beginning in 2023, they will only report medical debt in excess of $500. Reportedly, these changes will eliminate approximately 70% of medical collection debt entries from consumer credit reports.
Department of Veteran Affairs
Earlier this year, the Department of Veterans Affairs announced that it was applying new standards for reporting outstanding medical bills to consumer reporting companies.
Under the new rules, the VA will only report medical debt that meets all of the following criteria:
- The VA has exhausted all other debt collection efforts,
- The VA has determined the individual responsible is not catastrophically disabled or entitled to free medical care from the VA, and
- The outstanding debt is over $25. (This appears contrary to the No Surprises Act per the above information from the Big Three conumer credit reporting agencies. We are awaiting confirmation on the VA’s compliance with the new reporting laws vis a vis the $500 minimum debt threshhold for reporting purposes.)
Additionally, under consideration in Congress now are the following proposed changes in consumer credit reporting:
Under the new guidelines, employers would no longer be allowed to use a credit score to determine eligibility for employment. Other businesses that use credit reports to determine service usage such as utility and insurance companies are also under review to disallow consumer credit reporting as part of the decision making prcoess.
Amount of Time Negative Information Remains On Credit Reports
Currently, delinquent accounts remain on the report for seven years. Under the new proposal, information would only stay on the report for four years. However, bankruptcies could still be reported for seven years.
We’ll keep an eye on developments in consumer credit reporting changes and update our readers as these changes occur.
BNI Operatives: Situationally aware.
As always, stay safe.