The Biden administration announced a final rule that will remove unpaid medical bills from credit reports, preventing them from impacting access to mortgages, loans, and other financial opportunities. This change is expected to benefit over 15 million Americans and raise credit scores by an average of 20 points.
Unpaid medical bills will no longer appear on credit reports, where they can block people from mortgages, car loans or small business loans, according to a final rule announced Tuesday by the Biden administration. This change will remove unpaid medical debt from the credit reports of more than 15 million Americans, according to the bureau, which means lenders will no longer be able to take that into consideration when deciding to issue a loan.
The change is estimated to raise the credit scores by an average of 20 points and could lead to 22,000 additional mortgages being approved every year, according to the bureau. Vice President said, “No one should be denied economic opportunity because they got sick or experienced a medical emergency,” This rule is expected to eliminate more than $1 billion in medical debt for more than 700,000 Americans.The CFPB said that medical debt is a poor predictor of an individual's ability to repay a loan. Experian, Equifax and TransUnion, the three national credit reporting agencies, said last year that they were removing medical collections debt under $500 from U.S. consumer credit reports. The new rule from the Biden administration is set to take on the outstanding bills appearing on credit reports
MEDICAL DEBT CREDIT REPORTS BIDEN ADMINISTRATION LOANS FINANCE
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