Medical bills of less than $500 have been removed from credit scores by Atlanta-based Equifax and the other two leading consumer reporting companies.
The action will help consumers by undoing some restrictions on their finances, the companies said Tuesday.
“We understand that medical debt is generally not taken on voluntarily,” said a statement from the chief executives of Equifax, Experian and TransUnion. “We are committed to continuously evolving credit reporting to support greater and responsible access to credit and mainstream financial services.”
Plans to take the action were announced a year ago.
The three companies collect enormous amounts of consumer information, selling financial and demographic data to companies that want to assess the finances of their customers and potential customers. The companies also sell credit monitoring and fraud protection to consumers.
The companies provide businesses the credit scores of customers, a rating meant to convey the reliability and soundness of the individual’s finances. A consumer with a low credit score may find it hard to get a loan — or pay a much higher interest rate to get it.
That can put more stress on a household, especially those with lower incomes.
Medical bills are a special problem, one that is more acute in Georgia, said Liz Coyle, executive director of Georgia Watch, a pro-consumer group. “Medical debt often leads to bankruptcy, and Georgia has one of the highest rates of bankruptcy.”
The burden is proportionally higher among Black consumers, she said.
Medical bills can be crushing, soaring far above $500, and many consumers who dependably pay other expenses struggle with medical bills, Coyle said. “What the bureaus announced is good, but it’s not enough.”