{"id":11443,"date":"2025-03-09T20:00:16","date_gmt":"2025-03-09T20:00:16","guid":{"rendered":"https:\/\/finderica.com\/?p=11443"},"modified":"2025-03-09T20:00:16","modified_gmt":"2025-03-09T20:00:16","slug":"how-the-new-medical-debt-credit-report-rule-changes-things","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=11443","title":{"rendered":"How the New Medical Debt Credit Report Rule Changes Things"},"content":{"rendered":"\n<div>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"lazyload clicker_number\" style=\"position: absolute; height: 1px; width: 100%\" alt=\"ScoreCard Research\" data-count=\"104.245.38.58,104.245.38.58, 172.68.175.22\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\"><\/p>\n<p>Millions of Americans have crushing medical debt. But here\u2019s some good news: they won\u2019t have to worry about unpaid medical bills damaging their FICO scores anymore. On Jan. 7, the Consumer Financial Protection Bureau (CFPB) <a href=\"https:\/\/www.consumerfinance.gov\/about-us\/newsroom\/cfpb-finalizes-rule-to-remove-medical-bills-from-credit-reports\/\" target=\"_blank\" rel=\"noopener\">finalized a rule<\/a> that will remove a whopping $49 billion in medical bills from the credit reports of around 15 million Americans.\u00a0<\/p>\n<p>Here\u2019s more on how this new medical debt credit report rule works and what it means for you.\u00a0<\/p>\n<h2 class=\"wp-block-heading\">Make Quick Money to Pay Medical Debt<\/h2>\n<p>Medical debt \u2014 or any type of debt, really \u2014 puts a weight on your shoulders that can make you feel trapped. If you\u2019re having trouble chipping away at your medical debt, check out some of our favorite ways to make easy money below. <\/p>\n<h2 class=\"wp-block-heading\">What Does the New Medical Debt Credit Report Rule Do?<\/h2>\n<p>The CFPB\u2019s new medical debt credit report rule is designed to address long-standing issues with medical debt on credit reports. Here are the key changes:<\/p>\n<ul>\n<li><strong>Banning medical debts from credit reports<\/strong>. Once the rule goes into effect in around 60 days, credit reporting agencies like Equifax, Experian and TransUnion are banned from including medical bills on the credit reports they send to lenders.<\/li>\n<li><strong>Prohibiting lenders from using medical debt information<\/strong>. This rule will also prohibit lenders from using medical debt information against borrowers applying for loans.\u00a0\u00a0<\/li>\n<li><strong>Eliminating coercion by debt collectors<\/strong>. Debt collectors can no longer use the credit reporting system to coerce medical bill payments, regardless of their accuracy.\u00a0<\/li>\n<\/ul>\n<h2 class=\"wp-block-heading\">Why This Matters<\/h2>\n<p>Crippling medical debt has prevented thousands of Americans from getting approved for mortgages, car loans and even credit cards. But according to the CFPB\u2019s research, medical debt often isn\u2019t a good indicator of borrowers\u2019 ability to repay other types of debts. And for that reason, medical debts shouldn\u2019t be allowed to tarnish credit reports.\u00a0<\/p>\n<p>The CFPB estimates that once this new rule is in effect, it will lead to the approval of around 22,000 additional affordable mortgages each year. Plus, Americans with medical debt that was negatively affecting their FICO score may also see an average boost of 20 points.<\/p>\n<p>\u201cPeople who get sick shouldn\u2019t have their financial future upended,\u201d Rohit Chopra, the bureau\u2019s director, said <a href=\"https:\/\/www.consumerfinance.gov\/about-us\/newsroom\/cfpb-finalizes-rule-to-remove-medical-bills-from-credit-reports\/\" target=\"_blank\" rel=\"noopener\">in the news release<\/a>. \u201cThe CFPB\u2019s final rule will close a special carveout that has allowed debt collectors to abuse the credit reporting system to coerce people into paying medical bills they may not even owe.\u201d<\/p>\n<div class=\"adBorder\" id=\"thepe-307861450\">\n<h3>Drowning in Expenses?<\/h3>\n<p>Maybe you\u2019re scrambling after your car broke down. Or you got a medical bill you weren\u2019t expecting. Or inflation has finally pushed your budget over the edge. Take a breath. You don\u2019t need to go it alone.<\/p>\n<p>When money is tight, <a href=\"https:\/\/partners.thepennyhoarder.com\/when-money-is-tight-sdyn-prt\/\/?aff_id=384&amp;aff_sub3=when-money-is-tight-sdyn-prt\/&amp;aff_sub4=191825\" target=\"_blank\" rel=\"noopener\">these resources<\/a> can help you manage unexpected expenses without stress.<\/p>\n<\/div>\n<h2 class=\"wp-block-heading\">How Did Unpaid Medical Debt Affect Credit Before?<\/h2>\n<p>Before this rule, if you had a medical bill over $500 that went unpaid and was sent to collections, it would show up on your credit report and stain it for up to <a href=\"https:\/\/www.experian.com\/blogs\/ask-experian\/what-happens-when-medical-bills-go-collections\/\" target=\"_blank\" rel=\"noopener\">seven years<\/a>. This damages your credit score and makes it much harder to get approved for affordable loans or credit cards.\u00a0<\/p>\n<p>Even worse, medical debt in credit reports is often inaccurate or inflated. The CFPB says, around 15% of debt collection complaints they received in 2021 were related to medical debt collection. This means if you didn\u2019t have the habit of checking your credit report for mistakes, you might have unknowingly carried medical debt that you didn\u2019t even owe.\u00a0<\/p>\n<h2 class=\"wp-block-heading\">Does This Mean You Don\u2019t Have to Pay Medical Bills Anymore?<\/h2>\n<p>Though unpaid medical bills won\u2019t necessarily tank your credit score anymore, you shouldn\u2019t ignore them. Here\u2019s why:<\/p>\n<ul>\n<li><strong>Debt collectors can still pursue you<\/strong>. Just because medical debt isn\u2019t on your credit report doesn\u2019t mean it will magically disappear. If you owe medical bills, the provider can sell your debt to debt collectors, which means debt collectors could contact you and even take legal action to recover unpaid bills. Most health providers will send your bill to a medical collection agency if it goes unpaid for over 60, 90 or 120 days.\u00a0<\/li>\n<li><strong>Potential legal consequences<\/strong>. Though hospitals and medical providers are more likely to send your bill to a collection agency than sue you, it could still happen. And when you have a court judgment against you, it can result in wage garnishment or liens on your property in some states.<\/li>\n<li><strong>Interruptions in getting the care you need<\/strong>. If you\u2019ve racked up a significant amount of medical debt, some hospitals or health care providers may stop providing you non-emergency services.<\/li>\n<\/ul>\n<div class=\"adBorder\" id=\"thepe-463820175\">\n<h3>We Dare You to Take Control of Your Debt<\/h3>\n<p>Up for a debt challenge?<\/p>\n<p>In 10 days, <a href=\"https:\/\/partners.thepennyhoarder.com\/organize-your-finances-prt\/?aff_id=384&amp;aff_sub3=organize-your-finances-prt\/&amp;aff_sub4=191929\" rel=\"false noopener\" target=\"_blank\">these 10 practical steps<\/a>\u00a0could help you get back on the right financial track.<\/p>\n<\/div>\n<h2 class=\"wp-block-heading\">What\u2019s Next?<\/h2>\n<p>The rule is a step in the right direction. However, it\u2019s not a cure-all for the medical debt crisis and expensive health care in America. Here\u2019s what you can do to protect yourself and your finances moving forward:<\/p>\n<ol>\n<li><strong>Check your medical bills<\/strong>. Always review your bills for accuracy. If something looks off, don\u2019t hesitate to contact your provider or insurer to dispute it.<\/li>\n<li><strong>Negotiate payment plans<\/strong>. If you\u2019re struggling to afford a medical bill, talk to your hospital or medical care provider to see if you could work out a payment plan. Nonprofit hospitals are required by law to offer financial assistance programs to patients. State or local social services may also offer some financial help.\u00a0\u00a0<\/li>\n<li><strong>Know your rights<\/strong>. Debt collectors must follow the Fair Debt Collection Practices Act (FDCPA). This means they can only contact you about valid debts you owe. You also have the right to verify that you indeed owe the debt and the amount is correct. Check out the <a href=\"https:\/\/www.consumerfinance.gov\/about-us\/blog\/understand-how-cfpb-debt-collection-rule-impacts-you\/\" target=\"_blank\" rel=\"noopener\">CFPB\u2019s website<\/a> to learn more about your debt collection rights.\u00a0<\/li>\n<li><strong>Continue to monitor your credit reports<\/strong>. Even though medical debts will no longer show up on your credit report, you should still make it a habit to keep an eye on your credit reports for potential errors. You can get a free weekly report at <a href=\"https:\/\/www.annualcreditreport.com\/index.action\" target=\"_blank\" rel=\"noopener\">annualcreditreport.com<\/a>.<\/li>\n<\/ol>\n<h2 class=\"wp-block-heading\">Medical Debt Is Still an Issue in America<\/h2>\n<p>Medical debt is the single largest source of debt in collections. It disproportionately affects people with lower incomes and those without insurance, creating a <a href=\"https:\/\/www.healthsystemtracker.org\/brief\/the-burden-of-medical-debt-in-the-united-states\/\" target=\"_blank\" rel=\"noopener\">cycle of financial hardship<\/a>. According to a <a href=\"https:\/\/www.kff.org\/report-section\/kff-health-care-debt-survey-main-findings\/\" target=\"_blank\" rel=\"noopener\">KFF poll<\/a>, people with medical debt often cut spending on food and other household items to pay for medical bills. Though this new rule is a step toward making the credit system fairer and more reflective of people\u2019s actual financial health, many Americans still feel trapped by medical debt.\u00a0<\/p>\n<p>\u201cUnfortunately, this new rule only takes away the collateral damage of medical debt: the hit to consumer\u2019s credit reports,\u201d <a href=\"https:\/\/www.linkedin.com\/in\/bobbirebellkaufman\/\" target=\"_blank\" rel=\"noopener\">Bobbi Rebell<\/a>, CFP, Founder and CEO of Financial Wellness Strategies, said in an email. \u201cThe root cause, a broken health care system, is still there. The rule does nothing to prevent inaccurate and unfair billing, and consumers who are on the receiving end still have to deal with it.\u201d<\/p>\n<div class=\"adBorder\" id=\"thepe-1102874574\">\n<h3>Need a Hand With Bills?<\/h3>\n<p>Listen, we know it\u2019s tough out there. But there\u2019s no shame in asking for help.<\/p>\n<p><a href=\"https:\/\/partners.thepennyhoarder.com\/ask-for-money-sdyn-prt\/?aff_id=384&amp;aff_sub3=ask-for-money-sdyn-prt\/&amp;aff_sub4=191831\" target=\"_blank\" rel=\"noopener\">These companies<\/a> make it easy to help yourself and your bank account.<\/p>\n<\/div>\n<p><em>Jamela Adam is a personal finance writer covering topics such as savings, investing, mortgages, student loans and more. Her work has appeared in Forbes Advisor, Chime, U.S. News &amp; World Report, RateGenius and GOBankingRates, among other publications.<\/em><\/p>\n<p>        <!-- ACF Financial Disclaimer --><\/p>\n<p>        <!-- End ACF Financial Disclaimer --><\/p>\n<p>        <!-- Newsletter Signup Form --><\/p>\n<div class=\"newsletter-signup-wrapper-for-digioh\">\n<div class=\"col-xs-12 newsletter-wrap flex-row\">\n<div class=\"container flex-container\">\n<div class=\"col-xs-12 new-newsletter-form\">\n<p class=\"text-subheading\">Ready to stop worrying about money?<\/p>\n<p class=\"text-get-daily\">Get the SS Daily<\/p>\n<p class=\"email-privacy-policy-blurb-white\">\n<\/p><\/div>\n<\/div><\/div>\n<\/p><\/div>\n<p>        <!-- End Newsletter Signup Form --><\/p><\/div>\n<p><script type=\"text\/javascript\" id=\"wp-fcapi-js-before\">\n\/* <![CDATA[ *\/\n!function(f,b,e,v,n,t,s)\n{if(f.fbq)return;n=f.fbq=function(){n.callMethod?\nn.callMethod.apply(n,arguments):n.queue.push(arguments)};\nif(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';\nn.queue=[];t=b.createElement(e);t.async=!0;\nt.src=v;s=b.getElementsByTagName(e)[0];\ns.parentNode.insertBefore(t,s)}(window, document,'script',\n'https:\/\/connect.facebook.net\/en_US\/fbevents.js');\nfbq('init', '263664193816679');\n\/* ]]> *\/\n<\/script><br \/>\n<br \/><a href=\"https:\/\/www.thepennyhoarder.com\/debt\/medical-debt-on-credit-report\/\" target=\"_blank\" rel=\"noopener\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Millions of Americans have crushing medical debt. But here\u2019s some good news: they won\u2019t have to worry about unpaid medical bills damaging their FICO scores anymore. On Jan. 7, the Consumer Financial Protection Bureau (CFPB) finalized a rule that will remove a whopping $49 billion in medical bills from the credit reports of around 15<\/p>\n","protected":false},"author":1,"featured_media":11444,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[221],"tags":[238,367,739,483,75],"class_list":{"0":"post-11443","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-debt","8":"tag-credit","9":"tag-debt","10":"tag-medical","11":"tag-report","12":"tag-rule"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/11443","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11443"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/11443\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/11444"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11443"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11443"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11443"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}