Rule Finalized To Ban Medical Debt From Credit Reports

Lenders will no longer take medical debt into consideration when deciding to issue a loan.

The Biden administration finalized a rule Tuesday that bans certain debt from appearing on credit reports.

Unpaid medical bills will no longer be included in the reports. Meaning they will not be able to block people from mortgages, car loans or small business loans any more.

The “Consumer Financial Protection Bureau” rule will remove $49 billion in medical debt from the credit reports of over 15 million Americans. Lenders will no longer take that into consideration when deciding to issue a loan.

The change is estimated to raise the credit scores by an average of 20-points and lead to 22,000 additional mortgages being approved every year.

Vice President Kamala Harris said that the rule would be “life changing” for millions of families.