Goodbye, Medical Debt on Credit Reports!

Ever thought about how unfair it is that medical bills can ruin your chances of getting a mortgage or a car loan? The Biden administration has just made a big change to fix that. They've banned unpaid medical bills from showing up on your credit report. This is huge! It means around 15 million Americans will have $49 billion in medical debt wiped off their credit reports. Why is this such a big deal? Well, lenders look at your credit report to decide if they want to lend you money. If you have medical debt on there, it can make it harder to get a loan, even if you're really good at paying back other kinds of debt. This new rule is expected to raise people's credit scores by an average of 20 points, which could help about 22, 000 more families get mortgages each year. Vice President Kamala Harris said this change will be "lifechanging" for many families. She also mentioned that since 2021, states and local governments have used pandemic aid to clear more than $1 billion in medical debt for over 700, 000 Americans. That's a lot of people getting a fresh start! The Consumer Financial Protection Bureau (CFPB) said medical debt isn't a good way to tell if someone can pay back a loan. The national credit reporting agencies – Experian, Equifax, and TransUnion – had already started removing some medical debt from reports last year. But this new rule goes further, taking on the bigger medical bills that are still out there. So, if you've been struggling with medical debt, this is some great news!