New rule bans medical debt from credit reports

Name: New rule bans medical debt from credit reports
Uploaded: 2025-01-13T07:10:04.470Z
Duration: 2 min 9 s
Channel: Debt Dialogue
Description: A new rule issued by the outgoing Biden administration will ban medical debt from appearing on people's credit reports. It's estimated the move will raise credit scores for around 15 million Americans by an average of 20 points. Nancy Cordes reports.

Debt Dialogue

4 Video Views·Jan 13, 2025

A new rule issued by the outgoing Biden administration will ban medical debt from appearing on people's credit reports. It's estimated the move will raise credit scores for around 15 million Americans by an average of 20 points. Nancy Cordes reports.

More than 15 million Americans are living with unpaid medical debt that's shown up on their credit reports. And it can make it difficult or even impossible to run your life. But as CBS' Nancy Cordes reports, a new rule could change that. The world's best medical care doesn't come cheap. More than 40% of American adults say they're in debt due to medical or dental bills. Every credit card I've applied for has denied me. Carly Meir lives in northern Wisconsin. An emergency flight for a seizure when she was 18 left her $100,000 in debt. Her credit score is still below 500. My husband and I are first-time homebuyers. Well, he was a first-time homebuyer. When they ran my credit, they're like, hey, you can't even be on the loan. All that is set to change due to a new rule just finalized by the Consumer Financial Protection Bureau. The rule will prevent the three credit reporting agencies from including past due medical bills in credit reports. CFPB predicts the move will lift the credit scores of about 15 million Americans by an average of 20 points. Medical debt does not predict whether you are a high-risk person to lend money to. CBS medical contributor Dr. Selene Gounder. This is not people being irresponsible, going out shopping with their credit cards, spending more than they can afford. These are situations of life and death oftentimes. Meir is hoping she'll finally qualify for a car loan. Her 3-year-old son has Down syndrome and sees a specialist two hours away. I will admit when I got the message today, I did get a little teary-eyed. I'm honestly in shock that it has happened, and I'm very grateful that it has happened. The rule is set to take effect this spring. The banking industry, though, insists it's going to hurt borrowers by giving them access to more credit than they can afford. And GOP lawmakers are urging President-elect Trump to reverse all of these last-minute Biden rules and regulations. They say it's government overreach, and so this is not quite a done deal yet, Nora. Medical debt, a big issue. Nancy Cordes, thank you so much.