Unpaid medical bills will no longer appear on credit reports, where they can block people from mortgages, car loans or small business loans, as the result of a rule announced Tuesday by the Biden administration.
The Consumer Financial Protection Bureau rule will remove $49 billion in medical debt from the credit reports of more than 15 million Americans, according to the bureau.
The change is estimated to raise the credit scores by an average of 20 points and could lead to 22,000 additional mortgages being approved every year, according to the bureau. Vice President Kamala Harris said in a statement announcing the rule that it would be “life changing” for millions of families.
Harris also announced that states and local governments have used a sweeping 2021 pandemic-era aid package to eliminate more than $1 billion in medical debt for more than 700,000 Americans.
The administration announced plans for the rule in fall 2023.
