CRAs Start to Release Details About Changes to Reporting Process for Medical Debts

The announcement last week from the three major credit reporting agencies — Equifax, Experian, and TransUnion — was long on impact, but short on details. All that was issued was a press release that mentioned that the CRAs were doing, but did not include any details about how furnishers were going to have to change their operations. That changed yesterday, when Equifax sent out an email to its furnishers, providing some information about what they will need to do in order to comply with the new requirements.

For each of the three actions being taken, the entities who are going to be impacted are collection agencies and debt buyers, according to the email, a screenshot of which is included below. Two of the changes will go into effect on July 1, 2022, and the remaining change will go into effect March 30, 2023, according to the email.

Even though the credit reporting agencies will start removing paid medical debt items from consumers’ credit reports, furnishers are still expected to report paid medical collections with a status code 62. There should be no change to the current actions taken by furnishers. The credit reporting agencies will take it upon themselves to remove such tradelines from consumers’ credit reports themselves.

Starting July 1, furnishers will have to wait 365 days from the date of first delinquency with the original creditor that led to the account being sold or placed for collection before reporting it to a credit reporting agency. Currently, furnishers have to wait 180 days from the date of first delinquency before reporting on an unpaid debt. Medical debt collection accounts are defined as those with Creditor Classification Code 02.

Next March, furnishers will only be allowed to report medical debts where the balance is at least $500. When that provision goes into effect, collection agencies and debt buyers will be expected to not report medical debt collection accounts — identified as those with a Creditor Classification Code 02 — under the pre-defined minimum threshold.

The email indicated that more communications will be provided on the transition “as they become available.” Furnishers were provided with a generic email address for each of the credit reporting agencies if they have any questions.

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