The Consumer Financial Protection Bureau (CFPB) has announced a significant change to credit reporting rules that will prohibit unpaid medical bills from being included on credit reports used for loan eligibility. This new regulation is expected to eliminate approximately $49 billion in medical debt from the credit histories of over 15 million Americans, potentially increasing their credit scores by an average of 20 points. CFPB Director Rohit Chopra emphasized the importance of this change, stating that individuals facing health issues should not have their financial futures jeopardized due to medical debt. The rule addresses the fact that medical bills often arise from billing errors and are not reliable indicators of a person's repayment capability. With more than 100 million Americans grappling with medical debt, this reform aims to alleviate some of the financial burdens associated with healthcare costs. The rule is scheduled to take effect in March.
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