The bill HB23-1126 would prohibit the reporting of medical debt information by consumer reporting agencies (CRAs). It would also inform consumers about their rights by requiring debt collectors to notify consumers with medical debt that such debt can no longer be included on credit reports, with narrow exceptions.
Medical debt information in consumer reports (also known as credit reports) from the nationwide CRAs (i.e., Equifax, Experian and TransUnion) wreaks havoc in the financial lives of millions of Americans, including those in Colorado. Just this month, the Consumer Financial Protection Bureau (CFPB) reported that 13.5 percent of consumers with a credit report had a medical debt collection on their report in 2022. While this is a decrease from 16.4 percent in 2018, it still constitutes the largest source of debt collection blemishes on credit reports. Medical debts constituted 68.9% of accounts reported by contingency-fee-based debt collectors.
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