The CFPB rule aims to improve economic opportunities for millions by removing medical debt from credit reports, potentially raising scores and increasing mortgage approvals.
The Consumer Financial Protection Bureau ( CFPB ) announced a final rule on Tuesday that will remove unpaid medical bills from credit reports. This change is estimated to raise credit scores by an average of 20 points and could lead to 22,000 additional mortgages being approved every year. The rule will remove $49 billion in medical debt from the credit reports of more than 15 million Americans, meaning lenders will no longer be able to consider it when deciding on loan applications.
Vice President Kamala Harris stated that no one should be denied economic opportunity due to illness or medical emergencies. She also announced that states and local governments have used pandemic-era aid to eliminate over $1 billion in medical debt for more than 700,000 Americans. The CFPB emphasizes that medical debt is not a reliable indicator of an individual's ability to repay a loan. Last year, Experian, Equifax, and TransUnion, the three national credit reporting agencies, began removing medical collections debt under $500 from U.S. consumer credit reports
MEDICAL DEBT CREDIT SCORE LOANS CFPB VICE PRESIDENT HARRIS
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