According to the largest credit reporting agencies in America, a significant number of U.S. customers will have medical debt erased from their credit reports.

Equifax, ExperianTransUnion reported in joint statementAfter months of research, they will remove almost 70% of the medical collection debt accounts that are on consumer credit reports. They will make the changes this summer.

The companies stated that after two years of COVID-19 and an in-depth review of medical collection debts on credit reports, NCRAs (nationwide reporting agencies) have made changes to assist people with their recovery and personal well-being.

Beginning July 1, consumer credit reports won’t include medical debts which were paid by debt collectors. Credit reports could have been included for up to seven years for debts paid in the past. After being sent to collections, consumers will now be able to wait for a year before any unpaid collection medical debt appears on their credit reports. This is an increase from the six-months currently in effect. The agencies claim that this will give consumers more time to communicate with their health care providers or insurance companies.

Equifax and TransUnion have decided to stop including in credit reports any medical debts that are less than $500.

Even the most financially disciplined Americans can fall behind on their payments due to medical debt. This can lead to lower credit scores, which could impact their ability to obtain the best rates of credit and loans.

February reportThe Consumer Financial Protection Bureau estimates that there are $88 billion worth of medical debt in consumer credit records, as at June 2021. It added that most medical debts collected on consumer credit records are below $500.

According to the report, black and Hispanic customers, young adults, and those with low incomes are more likely than the national average to be in medical debt. The debt also has a “heavy impact” on veterans and seniors, the report said.