CFPB: Medical debt dominates collections items on credit reports

Medical collections tradelines constitute 57% of all collections on consumer credit reports, the CFPB said in a report released today. Collections tradelines are amounts of past-due accounts appearing on consumer credit reports. The agency examined trends in collections tradelines on consumer credit reports from 2018 to 2022, finding that most were for low-balance, non-financial accounts, with a median balance of $382. Medical was by far the most reported asset, followed by banking and financial (13%), telecom (11%), retail (8%), utilities and “other” (both at 4%), and rental and lease (less than 3%).

CFPB also noted that the total number of collections tradelines on credit reports declined by 33%, from about 261 million tradelines in 2018 to about 175 million tradelines in 2022. The share of consumers with a collection tradeline on their credit report also decreased by 20%. The lower figures are not necessarily the result of a decline in debt collection activity, nor an improvement in families’ abilities to pay their debts, “but a choice by debt collectors and others to report fewer collections tradelines while still conducting other collection activities,” the report said.