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

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 EXPGY, Equifax Inc EFX, and TransUnion 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.