The Consumer Financial Protection Bureau released proposed federal regulations that would prevent unpaid medical bills from being counted on consumers’ credit reports.
Americans would no longer have to worry about medical debts dragging down their credit scores under federal regulations proposed Tuesday by the Consumer Financial Protection Bureau.
The administration further called on states to expand efforts to restrict debt collection by hospitals and to make hospitals provide more charity care to low-income patients, a step that could prevent more Americans from ending up with medical debt. Although a single unpaid bill on a credit report may not hugely affect some people, the impact can be devastating for those with large health care debts.and fuel homelessness. People with low credit scores can also have problems getting a loan or can be forced to borrow at higher interest rates.
Administration officials said they plan to review public comments about their proposal through the rest of this year and hope to issue a final rule early next year.that medical debt — unlike other kinds of debt — does not accurately predict a consumer’s creditworthiness, calling into question how useful it is on a credit report.
The proposed rules would not only bar future medical bills from appearing on credit reports; they would also remove current medical debts, according to administration officials. Patients who used credit cards to pay medical bills — including medical credit cards such as CareCredit — will also continue to see those debts on their credit scores as they would not be covered by the proposed regulation.
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