The rule prohibits credit reporting agencies from including medical debt when calculating credit scores and bars lenders from considering medical information when assessing borrowers.
Medical bills are often the result of unavoidable medical complications or contain errors. The CFPB said past-due medical bills are often inflated, reflect multiple charges for the same service, or charge for services a person never received.
“People who get sick shouldn’t have their financial future upended,” Rohit Chopra, director of the CFPB, said in a statement. “The CFPB’s final rule will close a special carveout that has allowed debt collectors to abuse the credit reporting system to coerce people into paying medical bills they may not even owe.”
Lenders will also be prohibited from using medical information about medical devices, such as prosthetic limbs, for the purpose of using them as collateral for a loan.
In 2022, the three largest credit reporting agencies said they wouldno longer includesome medical debt from credit reports. Even after that change, credit reports for some 15 million Americans still reflected medical debts, leading some activists to push for a national ban.
The Biden administration, whichproposed the rule in June, finalized it less than two weeks before leaving the White House. Some congressional Republicans havethreatened to undothe rule, and the collections industry is likely to challenge it in court.
The new rule is one of several initiatives from government agencies to bolster medical debt forgiveness programs, improve access to reduced-cost care for those who need it, and crack down on predatory debt collection practices.
Some states and localities have also taken steps to eliminate medical debt for their constituents. TheWhite House saidthose jurisdictions are “on track” to eliminate about $15 billion in medical debt for nearly 6 million Americans. Federal funds have so far eliminated about $1 billion worth of medical debt.
As Insurers End COVID-19 Grace Period, Patients Can Expect Hospital Bills
What This Means For YouA new federal rule prevents medical debt from influencing your credit score. This change could improve access to loans, mortgages, and credit cards for many Americans while reducing the stress of medical bills. If you have unresolved medical debt, this rule might enhance your financial standing.
What This Means For You
A new federal rule prevents medical debt from influencing your credit score. This change could improve access to loans, mortgages, and credit cards for many Americans while reducing the stress of medical bills. If you have unresolved medical debt, this rule might enhance your financial standing.
2 SourcesVerywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Consumer Financial Protection Bureau.CFPB finalizes rule to remove medical bills from credit reports.Consumer Financial Protection Bureau.Complaint Bulletin: Medical billing and collection issues described in consumer complaints.
2 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Consumer Financial Protection Bureau.CFPB finalizes rule to remove medical bills from credit reports.Consumer Financial Protection Bureau.Complaint Bulletin: Medical billing and collection issues described in consumer complaints.
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
Consumer Financial Protection Bureau.CFPB finalizes rule to remove medical bills from credit reports.Consumer Financial Protection Bureau.Complaint Bulletin: Medical billing and collection issues described in consumer complaints.
Consumer Financial Protection Bureau.CFPB finalizes rule to remove medical bills from credit reports.
Consumer Financial Protection Bureau.Complaint Bulletin: Medical billing and collection issues described in consumer complaints.
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