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Vice President Kamala Harris announced Tuesday that Americans will no longer be penalized on their credit reports for medical debt.
The final ruling by the Consumer Financial Protection Bureau removes $49 billion Unpaid medical bills From the credit report of 15 million Americans.
Harris also said that a handful of states and localities have used American Rescue Plan (ARP) funding to support the elimination of more than $1 billion in medical debt for more than 700,000 Americans.
“No one should be denied economic opportunity because they become ill or experience a medical emergency,” Harris said in part. “We also cut back Medical debt burden By increasing avenues for forgiveness and cracking down on predatory debt collection tactics.”
Healthcare is expensive and frustrating. Government participation is a big driver
Vice President Kamala Harris announced Tuesday that Americans will no longer be penalized on their credit reports for medical debt. (AP Photo/Jose Luis Magana/AP Room News)
The decision fulfills part of Harris' call for action for states to reduce the burden of medical debt, which often prohibits them. Access to credit for essential living expenses
“This will change the lives of millions of families, making it easier for them to get a car loan, home loan or small business loan,” Harris said.
The CFPB ruling is expected to increase the credit score of affected individuals by an estimated average of 20 and result in the approval of approximately 22,000 additional mortgages each year.
Harris also announced that states and localities have used American Rescue Plan (ARP) funding to support the elimination of more than $1 billion in medical debt for more than 700,000 Americans. (iStock)
The policy group says Harris' small business will be overwhelmed by other higher taxes
The three major credit reporting agencies, Experian, TransUnion, and Equifax, It was announced in March 2022 They no longer include unpaid medical debts less than a year old and medical debts under $500 on credit reports.
While smaller unpaid bills no longer show up on credit reports, having a large amount of medical debt can have a big impact on a consumer's ability to get approved for a loan, even though CFPB research shows that medical bills are a poor predictor of a person's ability to pay off a loan. . off
Experian, TransUnion, and Equifax no longer include unpaid medical debt less than a year old and medical debt under $500 on credit reports. (Smith Collection/Gado/Getty Images/Getty Images)
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Although this law removes medical debt from showing up on credit reports, debt that is not settled must still be paid.
Those who Use credit cards To pay medical bills, they will still see those unpaid debts on their report because they are not subject to this ruling.