We are happy to follow up on a couple credit reporting questions that came up during our January 2023 Community Chat.
The questions that were brought up included:
As of March 31st 2023, will the credit bureaus delete any medical debt that is under $500?
Does Beyond look at the original credit reporting balance?
Question 1 - Will the bureaus delete any medical debt under $500?
To help answer the first question we have reached out to the bureaus and asked the question of “Will you (the bureaus) automatically remove any account that was reported that does not have a first reporting balance over $500?” As of January 23, 2023, we received the following responses from 2 of the 3 bureaus.
In the upcoming March update, Medical Debt accounts reporting a High Credit/Original Loan Amount on the METRO II (Field 12) under $500 will not output on credit reports. There is no action required on your part.
Keep in mind that an account's balance and the highest credit amount are two different things. Therefore paying down the balance below $500 will not stop the account from reporting. The only way for the account not to report is for the high credit to be under $500.
Yes, Equifax will remove accounts that are $499.99 and below beginning March 31, 2023.
Question 2 - Does Beyond look at the original credit reporting balance?
For the second question, we looked at the code and the Metro II Format. As indicated by TransUnion, the balance they look at is located in Field 12 in the layout. Upon inspecting the code and what data we pass into that field/position of the file, we have determined that the Amount Referred field will be used for this.
To better help you keep the system of record up-to-date with what is on the consumer's credit report, we suggest that you qualify all the accounts that have an Amount Referred under $499.99 and mark them as a DA to ensure that they will stop being sent to the bureaus even after they have wiped from their systems.
This can be accomplished by using Advanced Inquiry and setting up an action using the Credit Reporting Node to DA the accounts. It is also suggested that you add a History stamp to have a track record of why you did the DA on the account to have less confusion in the future.
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Credit Bureau Q & A for Reporting Medical Debts under New Rules (July 1, 2022)
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