Recent changes in reporting of medical debt has eliminated medical debt in collections from approximately 15 million Americans in the last year, according to data from Urban Institute, a nonprofit research organization.
Urban Institute analyzed credit bureau data from August 2018 to August 2023 to examine the levels of medical debt reported.
In July 2022, the credit bureaus removed paid medical collections from credit reports and stopped reporting unpaid medical collections until those debts were 1 year old, as opposed to the previous six-month grace period. In August 2022, medical debt in collections would no longer be used in calculating Vantage scores, one of the most used credit score models in the U.S., and after April 2023, medical collections under $500 would no longer appear on consumer credit reports.
Here are three additional things to know:
1. In August 2018, 16% of Americans had medical debt in collections on their credit records.
2. The share of adults with medical debt on their credit reports dropped to 11.6% in August 2022, one month after debts in collections less than a year old were removed from reports.
3. Only 5% of adults had medical debt in collections in their credit reports in August 2023, according to the most recent data analyzed.