In a game-changing move, Vice President Kamala Harris announced that medical debt will no longer hurt your credit score! This new ruling, brought to you by the Consumer Financial Protection Bureau (CFPB), is set to remove a massive $49 billion in unpaid medical bills from the credit reports of 15 million Americans. That’s a huge win for many!
But it gets even better—Harris highlighted that several states and local governments have already used American Rescue Plan funds to clear over $1 billion in medical debt for more than 700,000 people.
Harris put it simply: “No one should be denied economic opportunities because they got sick or had a medical emergency.” And she’s right. This ruling is a step forward in making sure that healthcare costs don’t hold people back from things like getting a car loan, home loan, or even starting a small business.
This decision is a huge relief for millions of families, as it helps them rebuild their credit and opens up new opportunities. Thanks to this change, people’s credit scores are expected to go up by an average of 20 points, which could mean 22,000 more mortgage approvals every year. Now that’s some serious progress!
In fact, the three biggest credit agencies—Experian, TransUnion, and Equifax—already decided last year to remove unpaid medical debts under $500 and debts less than a year old from credit reports.
However, while this move clears up small bills, big unpaid medical debts could still affect your credit if not addressed. So, it’s good to know that while the medical debts will be gone from your report, if you still owe them, they’ll need to be paid off. Also, if you’ve used credit cards to pay for medical bills, those debts will still show up as they aren’t part of this ruling.
Key Takeaways:
- Medical debt no longer impacts credit reports.
- Around $49 billion of debt will be cleared for 15 million Americans.
- This can boost your credit score by 20 points on average and help with loan approvals.
- Unpaid medical debts may still need to be settled, and credit card debts for medical bills aren’t covered by this change.
This is a huge step toward making life a little easier for families struggling with medical costs. No more worrying about that hospital bill stopping you from getting the things you need!
