The CFPB stated medical debt is a poor predictor of a person’s ability to repay loans
Unpaid medical bills will no longer affect credit reports and cause problems with mortgage, car, or business loan approvals.
The Consumer Financial Protection Bureau (CFPB) announced a new rule yesterday that will eliminate $49 billion in medical debt from the records of over 15 million Americans.
The CFPB estimates this change will boost credit scores by an average of 20 points and enable 22,000 additional mortgages annually. The federal agency stated medical debt is a poor predictor of a person’s ability to repay loans.
Vice President Kamala Harris hailed the move as “lifechanging,” emphasizing that no one should lose economic opportunities due to medical emergencies.
In 2023, national credit reporting agencies Experian, Equifax and TransUnion mentioned they would stop reporting medical debts under $500.