A proposed rule from the Consumer Financial Protection Bureau that would ban medical bills from credit reports has been met with applause from U.S. Rep. Seth Magaziner (D-R.I.) and other advocates.
“For months, Representative Marie Gluesenkamp Perez and I have been meeting with the Biden administration to advocate for removing medical debt from credit scores, and I am pleased to see that they have listened,” Magaziner said. “This proposed rule will help ensure credit scores will not be destroyed from an illness or trip to the emergency room and will provide breathing room for millions of working people.”
According to a news release, Magaziner joined 57 other lawmakers in urging the CFPB to take action in December to prevent creditors from using medical debt information to determine a person’s credit worthiness.
That action was taken in response to research that showed medical collections were on 43 million credit reports, with 58% of them being medical bills. Eliminating medical debt from credit reports could raise a person’s credit score by an average of 20 points, according to the news release.
The CFPB’s proposal would also require lenders to verify information about medical bills before they are sent to credit bureaus to ensure accuracy and prevent the inclusion of inaccurate or misleading information.
Generative artificial intelligence (AI) assisted a What’sUpNewp journalist with the reporting included in this story.
