New blog article: Medical debt removal from credit reports potentially impacts millions of consumers

[RobynJ]

Does this mean if there is a debt on your CR already it will come off or are they grandfathered in. My DH has a $325 medical from 5 years ago so I wonder what it's fate is. I planned on paying off this month. Since we got married I have been helping get his credit back in good standing. 

[babygirl1256]

That's super news . . . I don't have any medical collections but it will certainly help many consumers!!! That was a great collaborated effort by the CRAs and it would be great if they reduced the debt reporting from 7 years to 5 years . . . but I guess that will NOT happen any time soon. 

[calisig]

This is terrible news! The whole point of credit reporting is to create a system where people can get loans, and there be incentive to repay them. But if there is no incentive to repay medical debt, then why would any lender have incentive to make medical loans? And if no one has to pay their medical debts, then there is no incentive to have medical insurance either. Then on top of that, in order to make up for all the lost debt, medical providers will have to increase the fees of those who pay to cover all those who don't. Not reporting medical bad debt is terrible for everyone, and will just make it harder (more expensive) to access medical care.

[IluvuscOH]

Wife broke her ankle 70k plus to put it back together. I think the medical field will be okay. Also its small debt that is not suppose to be reported, they will just raise the cost of service over the threshold.

[Ramdriver]

 What about medical collections that were settled in full?

[Ramdriver]

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@calisig wrote:

This is terrible news! The whole point of credit reporting is to create a system where people can get loans, and there be incentive to repay them. But if there is no incentive to repay medical debt, then why would any lender have incentive to make medical loans? And if no one has to pay their medical debts, then there is no incentive to have medical insurance either. Then on top of that, in order to make up for all the lost debt, medical providers will have to increase the fees of those who pay to cover all those who don't. Not reporting medical bad debt is terrible for everyone, and will just make it harder (more expensive) to access medical care.

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On the contrary , I think one is more likely to pay if they know it'll be removed from their reports.

Example: I have a medical collection that I will pay if it gets removed. Otherwise I'll settle or let it ride. 

These collection agencys buy these debts for 10 cents or less on the dollar .

But refuse to PFD

[calisig]

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@Ramdriver wrote:

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I think one is more likely to pay if they know it'll be removed from their reports.

Example: I have a medical collection that I will pay if it gets removed. Otherwise I'll settle or let it ride. 

These collection agencys buy these debts for 10 cents or less on the dollar .

But refuse to PFD

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What you describe in your example is not what I am writing about. I'm not arguing against PFD. PFD is using reporting agencies to encourage payment, and PFD is part of free market negotiation, which is something I would absolutely support. What I think is detrimental is discontinuation of reporting unpaid debt - including medical debt, and unless I misunderstand, it is the discontinuation of reporting unpaid (medical) debt that many in this string think is a good thing.

[Ramdriver]

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@calisig wrote:

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@Ramdriver wrote:

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I think one is more likely to pay if they know it'll be removed from their reports.

Example: I have a medical collection that I will pay if it gets removed. Otherwise I'll settle or let it ride. 

These collection agencys buy these debts for 10 cents or less on the dollar .

But refuse to PFD

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What you describe in your example is not what I am writing about. I'm not arguing against PFD. PFD is using reporting agencies to encourage payment, and PFD is part of free market negotiation, which is something I would absolutely support. What I think is detrimental is discontinuation of reporting unpaid debt - including medical debt, and unless I misunderstand, it is the discontinuation of reporting unpaid (medical) debt that many in this string think is a good thing.

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True 

But that would only apply to debts under $500 begining next year.

Right now collections uder $100 are not considered by FICO scoring

[CreditCharmer]

By now, I guess we've all heard the changes surrounding removing medical debt.  My question is have the bureaus been honoring the requests for removal?  

Unfortunately the bureaus are known for blatantly ignoring rules, regulations, policy and procedures.  

Are they playing ball or are they making ppl jump through hoops?  Just curious.  

https://www.consumerfinance.gov/about-us/newsroom/cfpb-publishes-analysis-of-potential-impacts-of-me...