The Consumer Financial Protection Bureau (CFPB) Tuesday released a research report that found consumers’ credit scores may be overly penalized for medical debt that goes into collections and shows up on their credit report. According to the study, credit scoring models may underestimate the creditworthiness of consumers who owe medical debt in collections.

“Getting sick or injured can put all sorts of burdens on a family, including unexpected medical costs. Those costs should not be compounded by overly penalizing a consumer’s credit score,” said CFPB Director Richard Cordray. “Given the role that credit scores play in consumers’ lives, it’s important that they predict the creditworthiness of a consumer as precisely as possible.”

The study, “CFPB Data Point: Medical Debt and Credit Scores,” notes that over half of all collections on credit reports are associated with medical bills and the vast majority of medical debt reflected on credit records is reported by third-party collection agencies.

On a conference call with reporters Tuesday, senior CFPB officials said that the issue involves credit reporting agencies and debt collectors because hospitals and other healthcare providers rarely report items to the credit reporting agencies.

Complaints to the CFPB indicate that many consumers do not even know they have a medical debt in collections until they get a call from the collection agency or they discover the debt on their credit report.

The report, and statements by CFPB Director Richard Cordray and other officials, do not go so far as making recommendations that credit reporting agencies change their models to reflect these issues. The study, however, is seen as the first step in that process, likely culminating in a rule proposal.

Congress has also turned its attention to medical debt on credit reports. A bill was introduced in the U.S. House last year that would give patients behind on medical bills up to 120 days to work with debt collectors before the debt shows up on the consumer’s credit report.

Another bill currently under consideration in both chambers, the “Medical Debt Responsibility Act,” would require credit bureaus to delete reports of any delinquent medical debt within 45 days after it is resolved. In 2012, it received a hearing by the House Committee on Financial Institutions and Consumer Credit, but never made it out of committee to a vote on the floor.

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