WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) has proposed a new rule to eliminate medical bills from most credit reports. This will potentially remove up to $49 billion in medical debt from the consumer credit reports of some 15 million Americans. 

The proposed regulation aims to increase privacy protections, improve credit scores, and prevent debt collectors from using the credit reporting system to pressure individuals into paying disputed medical bills. By closing a regulatory loophole that allows medical debt information to be used in credit decisions, the CFPB expects to enhance underwriting accuracy and approve approximately 22,000 additional safe mortgages annually. 

This could be a big source of disruption for the credit repair industry. As medical debts make up 58% of all debt-collections entries it is a massive decision motivator for those seeking credit repair services. Removing these often unavoidable debts from credit may remove some of the urgency from credit repair, which companies continue to exploit with drawn-out services and sky-high fees. 

This would signify another small win in the quest for fair consumer rights and credit parity, 

The public can comment on the proposal until August 12, 2024.

See more here: https://www.consumerfinance.gov/about-us/newsroom/cfpb-proposes-to-ban-medical-bills-from-credit-reports/