The Consumer Financial Protection Bureau (CFPB) has finalized a rule that will remove an estimated $49 billion in medical bills from credit reports. This change is expected to boost credit scores for Americans with medical debt and lead to the approval of more affordable mortgages.
The Consumer Financial Protection Bureau ( CFPB ) has finalized a rule that will remove an estimated $49 billion in medical bills from credit reports . With the change, Americans with medical debt could see their credit scores increase by an average of 20 points, the CFPB reported. Vice President Kamala Harris also announced more than $1 billion in medical debt s have been eliminated.
It said the change is also expected to result in the approval of about 22,000 additional affordable mortgages every year. With the rule, consumer reporting agencies will be prohibited from including medical debt information with credit reports and credit scores sent to lenders. In addition, creditors will no longer be able to use certain medical information for lending decisions. The CFPB action comes after its own research found medical bills on credit reports are not good predictors of whether someone will repay a loan. CFPB Director Rohit Chopra said in a statement, 'The CFPB's final rule will close a special carveout that has allowed debt collectors to abuse the credit reporting system to coerce people into paying medical bills they may not even owe.' More than 100 million Americans struggle with medical debt, which comprises the largest type of debt in collections ahead of auto loans, credit cards and utilities, according to the Biden-Harris administration. Consumers are often asked to pay balances that should be covered by health insurance or financial assistance programs, and also frequently report receiving inaccurate medical bills, according to the CFPB
Medical Debt Credit Reports CFPB Consumer Finance Credit Scores
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