Biden’s Ambitious Plan: Wiping Out Medical Debt from Credit Reports

WASHINGTON >> Vice President Kamala Harris announced today that the Biden administration is taking concrete actions to remove medical bills from individuals’ credit scores, a move that could have a positive impact on the credit ratings of millions of people.

Harris emphasized that this change would make it easier for individuals to secure auto loans or home mortgages. Currently, approximately one in five people have medical debt. The vice president highlighted that the Consumer Financial Protection Bureau (CFPB) is initiating the rulemaking process to implement this change.

The CFPB stated that including medical debt in credit scores poses challenges because of the prevalence of mistakes and inaccuracies in medical billing.

“Access to healthcare should be a right, not a privilege,” Harris stated in a call with reporters to preview the action. “These measures will improve the credit scores of millions of Americans, enabling them to better invest in their future.”

The announcement comes after persistent efforts by the Biden administration to reduce the impact of medical debt on individuals’ creditworthiness. Last March, Equifax, TransUnion, and Experian, the major credit reporting companies, announced that they would cease reporting “some but not all medical bills” on credit reports.

In addition to eliminating medical bills from credit reports, the proposal aims to prevent creditors from considering medical bills when making loan decisions and prohibit debt collectors from using credit ratings to pressure individuals with healthcare-related debt. The government will gather feedback from small businesses before issuing a notice of proposed rulemaking next year.