Equifax-Backed Credit Score Provider Says Unpaid Medical Bills Do Not Predict Creditworthiness

Author: Vandana Singh | August 10, 2022 07:40am

• Wall Street Journal reported that VantageScore Solutions LLC would stop factoring all medical debt in collections into the latest versions of its scores starting October.
• The credit-score provider was founded by Experian Plc (OTC: EXPGY), Equifax Inc (NYSE: EFX), and TransUnion (NYSE: TRU) in 2006.
• VantageScore decided to remove all medical collections after finding that they aren’t good at predicting a person’s likelihood of repaying other debts, especially compared with other accounts in collections, said Silvio Tavares, the company’s CEO.
• Also Read: Equifax Sent Erroneous Credit Scores To Lenders Due To Technical Glitch: Report.
• Unpaid bills of hospitals and other medical providers often lower people’s credit scores.
• The company said that the latest version of the scores could increase by as much as 20 points. 
• Equifax, Experian, and TransUnion have delayed adding new unpaid medical debts to credit reports for an entire year after being sent to collections, up from a six-month waiting period. 
• Unpaid medical debts of less than $500 will be removed from credit reports starting in 2023, though it is possible that the dollar amount could rise, according to people familiar with the matter.

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