CFPB to Remove Medical Debt from Credit Reports in 2023
The Consumer Financial Protection Bureau (CFPB) is set to introduce significant changes to credit reporting practices in 2023. The agency aims to remove medical debts from consumer credit reports, a move that could offer substantial relief and promote financial fairness for millions of Americans.
Currently, unpaid medical bills can negatively impact credit scores, limiting access to essential services like loans, housing, and employment opportunities. The CFPB recognizes this issue and is working to detach medical debt from credit reports.
The proposed changes include omitting medical bills from credit reports and exploring options to support families recovering from medical emergencies. The CFPB is also considering excluding medical debt from credit reports used for underwriting decisions and discouraging aggressive collection practices. These revisions may limit creditors from utilizing medical bills in credit decisions and cease harsh collection practices.
With approximately 20% of Americans facing medical debt in 2022, these changes could significantly impact a large portion of the population. By prohibiting medical debts from appearing on credit reports, the CFPB's new rule may help individuals maintain better credit scores and overcome substantial barriers to essential services.
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