About 15 million consumers have medical debt on their credit reports, and it is controversial whether such bills should be included on credit reports because the medical debt is often unplanned, unavoidable, and unaffordable. Study after study finds that medical debts have little to no predictive value as to whether a consumer will repay a debt. In many cases, the debt may not even be owed or the amount may be inaccurate; medical billing is particularly problematic given the complex interface with insurance.
The response to criticism of medical debt on credit reports has been three-fold: rulemaking by the Consumer Financial Protection Bureau (CFPB), state legislation, and voluntary actions by the Big Three credit bureaus (Equifax, Experian, and TransUnion). The credit bureaus are officially known under the Fair Credit Reporting Act (FCRA) as the nationwide consumer reporting agencies (CRAs).
This article brings readers up to date on the latest developments on all three fronts: litigation involving the CFPB rule, new state legislation, and how consumers should respond to the voluntary actions by the big three nationwide consumer reporting agencies.
Support NCLC
Please support NCLC's work to advance consumer rights and economic justice with a tax-deductible contribution today!
Donate