Debts that are paid off after they go to collections will be removed, instead of staying on credit reports for up to seven years, Equifax, Experian and TransUnion announced.
Equifax, Experian and TransUnion — the giant credit-reporting companies that each keep files on roughly 200 million Americans — said on Friday that they will soon wipe away credit stains created by certain medical debts.
The changes — including removing black marks for people who settled a debt after it went to collections — were cheered by consumer advocates and reflected a growing acceptance that such debts aren’t the best predictor of a consumer’s financial behavior.
The companies said the changes would eliminate up to 70 percent of the medical debt accounts on consumers’ credit reports, which contain reams of data used to calculate the all-important three-digit credit score that is the key to mortgages, car loans, rental agreements and more.