Credit rating agencies have just declared that most medical debt will no longer appear on credit records.
Why have they done this?
These are capitalist organizations. They do not change policy due to some outbreak of suddenly being caring. Why is it that medical debt is to be scrubbed from credit records?
The answer is in the announcement. The decision to lend money to someone or not to do so, which is what a credit rating is used to inform, depends upon patterns of behavior, not sole instances of bad luck.
But the idea that medical debt leads to some grand portion of U.S. bankruptcies just isn’t true. If medical debt is so bad a guide to default that we don’t even want to include it in credit ratings, then it simply cannot be an important cause of bankruptcy, can it?
The people who lose in a bankruptcy filing are the lenders. They’ve told their data collectors that the presence of medical debt doesn’t make enough difference to your chances of filing for bankruptcy that it’s worth collecting said data. Therefore, medical debt is not an important determinant of whether you file for bankruptcy.
Money does talk, after all.
