The Biden Administration has introduced a groundbreaking proposal to ban medical debt from credit reports, aimed at improving Americans' credit scores and financial health. Announced by Vice President Kamala Harris and Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra, the rule would eliminate the consideration of medical debt in credit decisions. The proposal, which could take effect as early as next year, also aims to protect consumers from being coerced by debt collectors into paying inaccurate medical bills. According to the CFPB, millions of Americans still have medical debt on their credit reports, totaling over $49 billion, which negatively impacts their credit scores and access to loans. By removing medical debts from credit reports, consumers' credit scores could rise by an average of 20 points, making it easier to qualify for loans and obtain favorable interest rates. The CFPB is currently seeking public feedback on the proposal until August 12, 2024.
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