The Biden administration has announced a final rule that will remove unpaid medical bills from credit reports, a move that will benefit over 15 million Americans and potentially increase credit scores by an average of 20 points. This change is estimated to result in the approval of an additional 22,000 mortgages annually. Vice President Kamala Harris emphasized that this rule will be “lifechanging” for millions of families, ensuring that no one is denied economic opportunities due to medical debt.
In addition to this rule, states and local governments have utilized pandemic-era aid packages to eliminate over $1 billion in medical debt for more than 700,000 Americans. The Consumer Financial Protection Bureau highlighted that medical debt is not a reliable indicator of an individual’s ability to repay a loan. The three national credit reporting agencies have also previously removed medical collections debt under $500 from consumer credit reports. This latest step aims to alleviate the burden of medical debt for many Americans and improve their financial well-being.
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