AMARILLO, Texas (KAMR/KCIT) – At the beginning of July, three nationwide credit reporting agencies removed nearly 70% of medical debt from credit reports and made changes to how they will be handled in the future. While credit analysts said that up to 45% of Americans could gain from the changes, a report from WalletHub showed that people in Amarillo saw more positive impact than in the majority of the country.

As noted in previous reports and by WalletHub, the major changes enacted by the credit bureaus – Equifax, Experian, and TransUnion – included:

  • Beginning July 1, all medical debt in collections that were eventually paid off was removed from people’s credit report history.
  • Beginning July 1, new unpaid medical debts will not appear on credit reports for a full year, to offer people time to pay them without hurting their scores.
  • Beginning in the first half of 2023, medical debts of $500 or less will no longer appear on credit reports.

John McElyea of the Amarillo National Bank previously told that the relief could help consumers get better credit scores. While the top drivers of medical debt are often unpredictable and necessary procedures, such as emergency room visits, surgery, childbirth, and dental care, that debt could remain on a person’s credit report for up to seven years even if it was paid.

Counting debt in that way could even make credit reports less reliable, as McElyea noted that medical debts may not be accurate to how someone pays their bills.

“Because it is a one-time, emergency type situation as they have paid those medical items, being removed instead of staying on their reports for up to seven years and it will be removed now and it will definitely benefit a lot of those consumers,” said McElyea.

Even in just the first week of July, according to a recent study from WalletHub, it appears that the predicted benefits to consumers were founded. In a comparison of 182 cities across the country, using TransUnion data, WalletHub said that Amarillo was the city that would receive the fifth-most credit report relief.

Source: WalletHub

To determine where people would benefit the most from the credit report changes, WalletHub said that it focused on four metrics:

  • % of people who have medical collections debt
  • % of people who have medical collections accounts with a starting balance below $500
  • % of people who have at least one paid off medical collections tradeline
  • % of people with medical debt less than one year old

WalletHub’s data put Norfolk, VA, at the top of the list and Amarillo in its #5 spot. Meanwhile, New York appeared to benefit the least amount from the credit changes. Lubbock also appeared in the top 15 in the #13 position, Oklahoma City took position #15, and Albuquerque appeared to benefit less in its position at #61.

The full WalletHub report, along with further comparisons and methodology explanations, can be found here.

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