Credit reports and scores

Medical debt under $500 wiped from credit reports


The three most-used credit rating agencies have removed medical debt under $500 from consumer credit reports, potentially boosting some Americans’ credit scores.

Equifax, Experian and TransUnion announced the move earlier this week, noting that with this change, nearly 70% of the total medical debt in collections has been wiped from consumer credit files.

The shift could help boost credit scores for those with small amounts of medical debt, making it easier for them to obtain a loan, rent an apartment or secure a good interest rate.  

“We understand that medical debt is generally not taken on voluntarily and we are committed to continuously evolving credit reporting to support greater and responsible access to credit and mainstream financial services,” the three major credit bureaus’ CEOs said in a Tuesday press release.  

Other changes to credit reports

The credit rating agencies also announced last year that all medical collection debt paid in full is no longer included on credit reports. They also increased the time it takes for unpaid medical collection debt to appear on a report from six months to one year.  

The changes come amid pressure from lawmakers and the Consumer Financial Protection Bureau, which released a report in 2022 that found medical debt was the most common collection tradeline on credit records.

There was more than $88 billion in medical debt on consumer credit records as of June 2021. This type of debt was especially prevalent among Black and Hispanic people and young and low-income adults of all races and ethnicities, according to the report.  

Meanwhile, lawmakers in at least a dozen states and Congress are pushing for legislation addressing the large amounts of medical debt affecting Americans.  

Roughly 530,000 people annually reported entering bankruptcy due to medical expenses or time away from work due to illness, according to a 2019 study from the American Journal of Public Health. 

What is a good credit score?

Credit scores range from 300 to 850. This is how lenders view scores:  

  • Bad: 300-579
  • Fair: 580-669
  • Good: 670-739
  • Very good: 740-799
  • Exceptional: 800-850

Dig deeper: 

You can follow USA TODAY reporter Bailey Schulz on Twitter @bailey_schulz and subscribe to our free Daily Money newsletter here for personal finance tips and business news every Monday through Friday.

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