New Rule Changes Credit Reports Forever
Understanding the CFPB’s Medical Debt Rule
Medical debt has long been a burden for millions of Americans, impacting their credit scores and financial opportunities. The Consumer Financial Protection Bureau (CFPB) recently finalized a groundbreaking rule banning medical bills from credit reports. This medical debt removal is expected to lift $49 billion in debts off credit reports and help around 15 million Americans.
Why is this rule important? Research shows that medical debt is an unreliable predictor of a person’s ability to repay loans. Despite this, many Americans have faced higher borrowing costs, denied credit, or reduced access to mortgages due to unpaid or disputed medical bills appearing on their credit reports.
How This Impacts Your Credit Score
The new rule could lead to significant credit score improvements, with some consumers seeing increases of up to 20 points. For homebuyers, this change may result in easier access to affordable mortgage options. In fact, the CFPB estimates the rule will enable 22,000 additional mortgage approvals each year.
For those wondering, “How does medical debt affect credit scores?” the answer lies in outdated credit reporting practices. Until now, even small medical debts could negatively impact your score, regardless of their accuracy. The CFPB’s action ensures greater fairness by removing these debts entirely from credit reports.
If you are looking for more information on the most recent updates about medical debt being removed, feel free to click the link below to read more!
