Millions Benefitting from Medical Debts’ Being Removed from Credit Reports

By Consumers for Quality Care, on November 21, 2023

A new study conducted by the Urban Institute, and reported by KFF Health News, found that millions of Americans are benefitting from policy changes that have removed some medical debt from being reported in their credit scores.

When debt is included in a consumer’s credit report, it hurts their credit scores, limiting their access to credit and hurting their overall financial well-being. Over the past year, major credit rating agencies have begun the process of no longer reporting some medical debt in credit scores, specifically small debts less than a year old. As a result, millions have seen their credit scores increase.

The Urban Institute study found that approximately 27 million consumers witnessed notable score improvements once medical debt was no longer factored into their credit scores.

Leading consumer and patient advocates support these policy changes. Efforts are underway to push for broader changes, such as the Biden administration’s plan to eliminate all medical debts from credit scores, as well as similar efforts on the state level in Colorado and New York.

Medical debt should not hurt consumers’ credit scores. CQC applauds these efforts and urges more collaboration between both public and private entities to help lessen the burden of medical debt for millions of Americans.