The Consumer Financial Protection Bureau has finalized a rule that will exclude medical debt from being included in credit scores. This change is expected to impact people’s ability to qualify for home mortgages, car loans, and rent. The rule goes into effect 60 days after it is published in the Federal Register.
The Biden administration proposed this rule in June, amid concerns that the Trump administration would reverse or delay it due to the recent presidential election. However, Vice President Kamala Harris announced that the final rule will make it easier for families to be approved for loans, stating it will be “life-changing” for millions of people.
Medical debt disproportionately affects disabled adults and Black Americans, who are more likely to live below the poverty level. The Centers for Disease Control and Prevention reports that one in five families with a disabled member have medical debt, compared to one in 10 without.
While some states like California already have laws preventing medical debt from credit scores, this federal rule will ensure broader protection. In July 2022, Equifax, Experian, and TransUnion excluded paid-off medical debt from consumer credit reports, reducing the percentage of people with medical debt reflected in their credit scores by over 10%.
Source: https://www.motherjones.com/politics/2025/01/medical-debt-ban-credit-scores-biden