‘Credit Bureaus to Strip 70% of Unpaid Medical Debt’

On March 18 2022, a “big if true” CNBC headline suggesting that credit bureaus were planning to remove medical debts from consumer credit reports made the rounds on social media:

In addition to the above post to Reddit’s r/povertyfinance, popular Twitter accounts reiterated the claim (with a few links attributing a claim about “unpaid medical debt” to Reuters):

However, a search for “unpaid medical debt” and “Reuters” in the seven-day period ending March 21 2022 returned a scant 11 results. A subsequent search for “unpaid medical debt” and “70” returned several March 2022 articles.

At the top of the page, Google News results appeared, with a “People also ask” section under it. The very first result in the search was a CNBC link from March 18 2022:

On March 21 2022, the result appeared to validate the “70% of unpaid medical debt” talking point; the visible portion of headline and description read:

Credit bureaus to strip 70% of unpaid medical debt … — CNBC

3 days ago — The bureaus — Equifax, TransUnion and Experian — say that medical collection debt will no longer appear on credit reports if that debt has …

CNBC’s article (which was, again, the very first Google result) featured a URL matching the preview. It was: https://www.cnbc.com/2022/03/18/credit-bureaus-to-strip-70-percent-of-unpaid-medical-debt-from-credit-reports.html.

However, the article made it clear from the very first sentence that there was at least some nuance involved:

70% of medical collection debt will soon be removed from credit reports—and it could boost your credit score

We checked the oldest archived copy of the URL to determine whether the headline had been changed, but a version archived on March 18 2022 did not have a headline reflecting the URL, either. The article’s live version on March 21 2022 reported something slightly different:

The three major credit reporting agencies announced Friday [March 18 2022] that they will strip 70% of medical debt information out of consumers’ credit reports, starting July 2022.

The bureaus — Equifax, TransUnion and Experian — say that medical collection debt will no longer appear on credit reports if that debt has already been paid. The agencies are also increasing how long it takes for that debt to appear on a consumer’s report, from six months to one year. And starting sometime in “first half of next year,” they will also remove unpaid medical collection debt from reports if it’s less than $500.

One of the agencies’ regulators, the Consumer Financial Protection Bureau (CFPB), had been considering a ban on medical debt before these changes were announced.

As of the second quarter of 2021, 58% of bills that were in collections and on people’s credit records were medical bills, according to a recently published CFPB report on medical debt. But the report also found that medical debt collections were “less predictive of future payment problems than other debt collections,” like mortgages or car loans.

The headline and URL both mentioned “70% of unpaid medical debt,” but additional reporting referenced debt that had already been paid. A March 21 2022 CNN Money article (“Credit reporting agencies will wipe out most medical debt”) referenced a March 18 2022 press release issued jointly by the three credit reporting bureaus referenced in the story — Experian, Equifax, and TransUnion.

An initial search for the press release largely returned articles quoting it, but not linking to it. We located a copy on the website of credit bureau Experian, dated March 18 2022. It was titled “Equifax, Experian, and TransUnion Support U.S. Consumers With Changes to Medical Collection Debt Reporting,” and subtitled “Joint Measures from Consumer Credit Reporting Agencies Remove Nearly 70% of Medical Collection Debt Tradelines from Consumer Credit Reports.”

The press release was brief:

March 18, 2022: The three nationwide credit reporting agencies (NCRAs) – Equifax (NYSE: EFX), Experian (LON: EXPN), and TransUnion (NYSE: TRU) – [on March 18 2022] announced significant changes to medical collection debt reporting to support consumers faced with unexpected medical bills. These joint measures will remove nearly 70% of medical collection debt tradelines from consumer credit reports, a step taken after months of industry research.

According to the Kaiser Family Foundation, two-thirds of medical debts are the result of a one-time or short-term medical expense arising from an acute medical need. After two years of the COVID-19 pandemic and a detailed review of the prevalence of medical collection debt on credit reports, the NCRAs are making changes to help people to focus on their personal wellbeing and recovery.

Effective July 1, 2022, paid medical collection debt will no longer be included on consumer credit reports. In addition, the time period before unpaid medical collection debt would appear on a consumer’s report will be increased from 6 months to one year, giving consumers more time to work with insurance and/or healthcare providers to address their debt before it is reported on their credit file. In the first half of 2023, Equifax, Experian and TransUnion will also no longer include medical collection debt under at least $500 on credit reports.

The companies’ CEOs provided a joint statement on the decision to change medical collection debt reporting:

“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 wellbeing,” said Mark W. Begor, CEO Equifax; Brian Cassin, CEO Experian; and Chris Cartwright, CEO TransUnion. “As an industry we remain committed to helping drive fair and affordable access to credit for all consumers.”

Equifax, Experian, and TransUnion described three changes to credit reporting of medical debt, none of which would necessarily remove “70% of unpaid medical debt” (the statement said “nearly 70% of medical debt.”) The changes were described as:

• Removal of paid medical debt, not unpaid medical debt;
• New medical debt would be added after twelve months, versus the current six-month period before credit reports reflected medical debt, and;
• No longer including sums under $500.

Social media posts indicated that a CNBC headline claiming that credit bureaus would cancel “70% of unpaid medical debt” spread unchecked on social media, misleading Americans into believing the words accurately reflected a change to credit reporting; no indication on the page indicated the headline had (or had not) been changed, and no explanation for the URL mismatch appeared. Many news outlets quoted a joint press release, but they did not link to it. In that March 18 2022 press release, Equifax, Experian, and TransUnion announced they would remove “paid medical debt” tradelines in July 2022, that new medical debt would not be added for twelve months rather than six, and that sums of under $500 would no longer be added “in the first half of 2023.”