(TheRedWire.com) – On Thursday, the Biden administration’s Consumer Financial Protection Bureau (CFPB) introduced a new proposal that, if successful, could stop unpaid medical bills from appearing on credit reports. If the measure is successful, millions of Americans could see an increase in the credit score that creditors evaluate during the loan application process.
According to the announcement, the measure aimed to “end coercive debt collection tactics” while improving credit scores by reducing inaccurate data. The federal agency argued that by not having medical debts appear on credit reports, Americans could more quickly recover after a medical crisis. It would also stop debt collectors from pushing people to pay off debt they may not have owed initially and clean up any inaccurate or mistaken information.
Vice President Kamala Harris noted in a post on X, formerly known as Twitter that medical debt has been damaging to credit scores for years, and this new measure would allow millions of Americans to make investments in their future.
According to a CFPB report from last year, around 20 percent of Americans revealed that they had some medical debt. The pandemic exacerbated this situation, as many insured and uninsured patients had to undergo hospitalization.
Rohit Chopra, the bureau’s director, stated that medical bills have been shown not to have a significant predictive value regarding credit scores. Yet, millions of Americans have to deal with their medical debt’s effects on their credit reports.
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