Unpaid medical bills banned from appearing on credit reports due to new Biden administration rules

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Unpaid medical bills will no longer show up on credit reports, a major change announced by the Biden administration on Tuesday. The new rule, implemented by the Consumer Financial Protection Bureau (CFPB), aims to remove $49 billion in medical debt from the credit reports of more than 15 million Americans, paving the way for improved access to loans and financial opportunities. The CFPB noted that the rule would prevent lenders from including unpaid medical debt in decisions about mortgages, auto loans or small business loans. The change is expected to increase credit scores by an average of 20 points, potentially resulting in an additional 22,000 mortgage approvals each year. Vice President Kamala Harris praised the rule's transformative potential, saying it “changes the lives of millions of families.” “No one should be deprived of economic opportunity because they are sick or experiencing a medical emergency,” Harris said in a statement. In addition to the changes to credit reporting, Harris also highlighted how state and local governments are taking advantage of the 2021 pandemic. Pandemic Funding Efforts – Era Assistance Plan aims to eliminate more than $1 billion in medical debt, benefiting more than 700,000 Americans. The CFPB first proposed the rule in the fall of 2023, emphasizing that medical debt is an unreliable indicator of an individual's ability to repay the loan. The three major credit reporting agencies – Experian, Equifax and TransUnion – have taken steps to remove medical collection debts under $500 from last year's reports. The new rules expand these efforts by targeting remaining unpaid medical bills that appear on credit reports. Like this: Like Loading… Discover more from Baller AlertSubscribe to get the latest posts delivered to your email.

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