(CNN) — Americans won’t have to worry about unpaid medical bills damaging their credit reports and scores much longer. The Biden administration is finalizing a rule Tuesday that will end the inclusion of medical debt on credit reports and ban lenders from using certain medical information in loan decisions.
What the rule entails
The rule will remove an estimated $49 billion in medical bills from the credit reports of about 15 million people, the Consumer Financial Protection Bureau (CFPB) said in a press release. This move aims to protect individuals from having their financial future jeopardized due to health-related expenses.
Impact on credit scores
Those with medical debt on their credit reports could receive a 20-point boost, on average, in their credit score, according to the bureau. The rule is also expected to lead to the approval of about 22,000 additional mortgages every year, providing relief to many families.
Addressing a pressing issue
High health care costs have been a significant concern for Americans, with medical bills becoming a common cause of financial strain. The Biden administration's efforts to alleviate the burden of medical debt on consumers have been met with widespread support.
Further initiatives
In addition to the new rule, states, counties, and cities have been taking steps to eliminate medical debt for individuals in need. Through funding from the American Rescue Plan Act, over $1 billion in medical debt has already been erased, with more relief efforts underway.
medical debt, credit scores, Biden administration, financial relief, American Rescue Plan Act
