Medical bills often arise unexpectedly, presenting individuals with substantial expenses for necessary procedures or medications. Despite the imperative nature of these costs, worrying about their impact on credit scores should not be an added concern for consumers. Recognizing this, the Consumer Financial Protection Bureau (CFPB) collaborated with major credit bureaus like Equifax, Experian, and Transunion to exclude medical bills from credit score calculations. Patricia Kelmer, the health care campaigns director at the U.S. PIRG Education Fund, emphasizes the distinct nature of medical debt, advocating for its separation from credit reports to prevent undue financial strain on individuals already burdened by illness or injury.
Historically, medical debt posed significant challenges for consumers, lingering on credit reports for seven years and hampering their ability to secure loans or mortgages. The CFPB's 2022 report revealed that approximately 20% of Americans grappled with medical debt, amounting to nearly $90 billion in total. Rohit Chopra, the CFPB director at the time, underscored the incongruity between the predictive value of medical bills in credit decisions and the widespread inclusion of such debts in consumers' credit histories. The decision to remove medical bills from credit reports aimed to alleviate the financial pressures faced by individuals during times of illness or injury.
In collaboration with Equifax, Experian, and Transunion, the CFPB instituted measures to alleviate the impact of medical debt on credit scores. These efforts include the removal of paid medical bills from credit reports, exclusion of medical debts under $500, and a one-year delay in posting medical bills to provide consumers with sufficient time for payment. Building on these initiatives, the U.S. PIRG Education Fund and the CFPB continue to advocate for expanded protections against adverse credit reporting due to medical debt. Additionally, consumers are advised to vigilantly review their credit reports for inaccuracies and to scrutinize medical bills before payment, ensuring that they are not unjustly burdened by erroneous or inflated charges.