The Consumer Financial Protection Bureau (CFPB) has finalized a groundbreaking rule that will remove an estimated $49 billion in medical bills from the credit reports of about 15 million Americans. This new rule prohibits the inclusion of medical bills on credit reports and bans lenders from using medical information in their lending decisions. By increasing privacy protections and preventing debt collectors from leveraging the credit reporting system to coerce payments, the CFPB aims to create a fairer financial landscape for consumers.
This rule follows changes made by major credit reporting agencies and credit scoring companies to reduce the impact of medical debt on credit scores and is expected to have a significant positive impact on credit scores, with an average increase of 20 points for Americans with medical debt. Additionally, it is anticipated to lead to the approval of approximately 22,000 more affordable mortgages annually. The rule will take effect 60 days after its publication in the Federal Register, and while the exact date of publication has not yet been set, this marks a major step forward in reducing the financial burden of medical debt and enhancing consumer privacy.
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Source: Copilot 1/8/25. Consumer Financial Protection Bureau. (2025, January 7). *CFPB Finalizes Rule to Remove Medical Bills from Credit Reports*. Retrieved from consumerfinance.gov.
