Harris announces billions in unpaid medical bills removed from credit reports

Vice President Kamala Harris announced Tuesday that Americans will no longer be penalized for medical debt on their credit reports.

The Consumer Financial Protection Bureau’s final decision will remove $49 billion in unpaid medical bills from the credit reports of 15 million Americans.

Harris also said that a number of states and territories have received funds from the American Rescue Plan (ARP) to support the elimination of medical debt of more than $ 1 billion for more than 700,000 Americans.

“No one should be deprived of economic opportunity because they got sick or had an emergency,” Harris said, in part. “We’ve also reduced the burden of medical debt by expanding the path to forgiveness and eliminating debt collection tactics.”

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The decision fulfills part of Harris’ request that states reduce the burden of medical debt that often prevents access to credit for essential living expenses.

“This will change the lives of millions of families, making it easier to get approved for car loans, home loans, or small business loans,” said Harris.

The CFPB’s decision is expected to increase the credit scores of those affected by an estimated 20 points and lead to approximately 22,000 additional credit approvals each year.

Harris also announced that states and localities are using American Rescue Plan (ARP) funds to support the elimination of more than $1 billion in medical debt for more than 700,000 Americans. (iStock / Stock)

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The three major credit reporting agencies, Experian, TransUnion and Equifax, announced in March 2022 that they will no longer include unpaid medical debt less than a year old and medical debt under $500 on credit reports.

Although small unpaid debts no longer show up on credit reports, having a large amount of medical debt can have a significant impact on a consumer’s ability to get approved for a loan, although CFPB research shows that medical debt does not accurately predict a person’s ability to repay a loan. is turned off.

Experian, TransUnion and Equifax no longer include unpaid medical debt less than a year old and medical debt under $500 on credit reports. (Collection of Smith/Gado/Getty Images / Getty Images)

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Although this action will remove the doctor’s debt from appearing on credit reports, outstanding debts will still need to be paid.

Those who use credit cards to pay medical bills will still see those unpaid bills on their report as they are not included in this decision.