Vice President Kamala Harris hailed a new rule announced on Tuesday that will have a life-changing impact on thousands of Arizonans. The rule aims to eliminate medical debt from their credit scores, providing them with a fresh start and improved financial prospects.
The CFPB rule is set to eliminate $49 billion worth of medical debt from the credit reports of over 15 million Americans, with approximately 460,000 individuals in Arizona benefiting from this action.
According to the bureau, the change is expected to increase credit scores by an average of 20 points and potentially result in the approval of an additional 22,000 mortgages in the country each year.
According to a statement from DNC Deputy Communications Director Abhi Rahman, the impact of medical debt on credit scores has been forcing individuals in Arizona to make significant sacrifices. These sacrifices may include giving up on dreams of homeownership, starting a business, or pursuing further education.
“This decision by the CFPB to remove medical debt from credit reports marks a significant milestone in our ongoing battle,” saidfh
In the fall of 2023, the administration unveiled its plans for the rule.
According to the Consumer Financial Protection Bureau (CFPB), medical debt does not accurately determine an individual’s repayment capability for a loan. In fact, the three major credit reporting agencies, Experian, Equifax, and TransUnion, made a decision last year to eliminate medical collections debt below $500 from credit reports of American consumers.
The Biden administration is implementing a new rule that aims to address the outstanding bills that are reflected on credit reports.