Most medical debts removed from credit reports

The Consumer Financial Protection Bureau (CFPB) has released a report describing the burden of medical debt in the United States. It found that roughly 43 million people had medical bills totaling $88 billion on their credit reports in June 2021. The total amount is likely much higher because not all medical debts are reported to consumer reporting companies.

Other findings included:

Fifty-eight percent of all third-party debt collection tradelines were for medical debt, far exceeding the next most common tradeline of telecommunications debt at only 15%.

Black and Hispanic people, and young adults and low-income individuals of all races and ethnicities, are more likely to have medical debt than the population as a whole.

Medical debt is more prevalent in the Southeast and Southwest. A separate survey conducted in 2018 by the Census Bureau found that the South leads the nation in medical debt. Just over 22 percent of households in the South reported having it.

The COVID pandemic has increased the burden of medical debt.

The CFPB says medical debt collections are less predictive of a person’s future payment problems than other debt collections are. And yet they can restrict a person’s access to credit and result in other negative consequences that may include making it difficult to rent a home, raising the cost of insurance, making it hard to find a job, and leading to physical and mental problems.

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