Medical Debt's Removal from Credit Reports Boosts Credit Scores
Tuesday, 7 January 2025, 17:25
Major Reforms in Medical Debt Reporting
On Tuesday, the Biden administration announced a pivotal rule that bans unpaid medical debt from appearing on credit reports. This means that millions of individuals will no longer face barriers when applying for mortgages, car loans, or small business loans.
Impact on Credit Scores and Loan Approvals
- This new measure is expected to remove a staggering $49 billion in medical debt from the credit reports of more than 15 million Americans.
- With this rule, lenders cannot consider medical debt, potentially increasing the credit scores of affected individuals by an average of 20 points.
- Estimates suggest this change could lead to 22,000 additional mortgages being approved each year.
Vice President Kamala Harris emphasized the social impact of this rule, stating that it would promote financial equity.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.