Protecting Consumer Credit Scores From Medical Debt Collections

News provided by

Mar 18, 2022, 11:24 ET

STAMFORD, Conn., March 18, 2022 /PRNewswire/ -- Earlier today, the three national credit reporting agencies (CRAs), Equifax, Experian and TransUnion, announced a joint industry measure to remove nearly 70% of medical collection debt accounts from consumer credit reports.

The CRAs also announced that effective July 1, 2022, they will no longer include paid medical collection debt on consumer credit reports and will extend the time for unpaid medical collection debt from six months to one year, giving consumers more time to work with insurance and/or healthcare providers to address their medical debt before it impacts their credit.

VantageScore applauds this decision and shares in the commitment to help consumers recover from the COVID-19 pandemic.

In 2013, VantageScore made the empirically-driven decision to become the first national credit scoring company to entirely eliminate medical collection accounts that have been paid off. Since then, the company has taken a number of additional steps to reduce the impact that medical debt has on a person's credit score.

"This is a major win for consumers. Medical accounts are different from other consumer debt because they often arise from unforeseen circumstances and complicated, opaque insurance and healthcare provider billing practices," said Silvio Tavares, President & CEO of VantageScore. "Based on empirical research, these types of debts and collections that have been paid off are often not reliable indicators of a consumer's creditworthiness. This is why VantageScore was a pioneer in eliminating their impact in our credit models nearly a decade ago, and it is one reason why more than 2,200 financial institutions use our scores."

Throughout its history, VantageScore has been an innovator in making credit scores more predictive, inclusive, and more equitable for consumers.

For more information on how VantageScore enables greater financial inclusion, fairness, and accuracy in credit modeling, please visit www.VantageScore.com.

About VantageScore Solutions

VantageScore Solutions develops consumer credit scoring models that combine the need for both financial inclusivity and dependable predictiveness across all scoring ranges. The company's most recent models score approximately 96 percent of all adults 18 and older – including 37 million more people than conventional models – without sacrificing safety and soundness. As a result, lenders using VantageScore can extend credit to those who have been historically marginalized, including minority and lower-to-middle income Americans. VantageScore credit scores are used by thousands of lenders, landlords, utility companies, telecom companies, and many others to determine creditworthiness. Additionally, tens of millions of consumers rely on free access to their VantageScore credit scores to monitor their own creditworthiness.

VantageScore Solutions was launched in 2006 and is owned by America's three national credit reporting companies (CRCs) – Equifax, Experian, and TransUnion. Using a patent-protected tri-bureau methodology, VantageScore delivers time-tested, innovative and more consistent credit scoring models across all three CRCs.

SOURCE VantageScore