WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) released a report today that found that more than one-in-four consumers with a credit report have at least one debt in collection by third-party debt collectors.
Today’s report, which covers 2004 to 2018, is drawn from the Bureau’s Consumer Credit Panel (CCP), a nationally representative sample of approximately 5 million de-identified credit records maintained by one of the three nationwide credit reporting companies. Close to 900 third-party debt collectors furnished collection tradelines in the CCP. A tradeline is information about a consumer account that is sent, generally on a regular basis, to a credit reporting company. Tradelines contain data such as account balance, payment history, and status of the account.
Today’s findings show that more than one-in-four consumers (28 percent) with a credit report in the CCP in 2018 had at least one third-party collections tradeline on their file. The study also found that more than three-out-of-four third-party collections tradelines are for non-financial debt. More than half (58 percent) of these tradelines are for medical debt and another 20 percent for telecommunications or utilities debt. Positive payment information is generally not furnished for medical or telecommunications debt.
Banks and other original creditors may collect their own debts or hire third-party debt collectors. In some instances, the original creditors may sell the debts to debt buyers. The buyers may try to collect on these debts, or hire other third-party debt collectors. There are approximately 9,330 debt collectors and debt buyers in the United States.
The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by regularly identifying and addressing outdated, unnecessary, or unduly burdensome regulations, by making rules more effective, by consistently enforcing federal consumer financial law, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.