The Biden administration has announced a significant change to credit reporting practices by removing unpaid medical bills from credit reports. This new rule, introduced by the Consumer Financial Protection Bureau (CFPB), is expected to benefit over 15 million Americans by eliminating approximately $49 billion in medical debt from their credit histories. As a result, millions could see an average increase of 20 points in their credit scores, which may lead to an estimated 22,000 additional mortgages being approved annually. Vice President Kamala Harris emphasized the importance of this change, stating that no one should face economic hardship due to medical emergencies. The rule comes on the heels of previous efforts, including the use of pandemic relief funds to alleviate over $1 billion in medical debt for 700,000 Americans. The CFPB argues that medical debt is not a reliable indicator of a person's ability to repay loans, paving the way for improved financial opportunities for many families.
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