New rule could wipe medical debt off credit reports [Video]

CHARLOTTE, N.C. (WBTV) – For people bogged down by medical debt, there could be good news on the horizon.

The Consumer Financial Protection Bureau (CFPB) just proposed a rule to remove medical bills from credit reports. The rule would mean medical debt could no longer keep people from things such as getting approved for a mortgage.

On top of removing medical debt from most credit reports, the proposal says it would prevent debt collectors from using credit reports to coerce people to pay, and credit reporting companies would also no longer share medical debts with lenders, stopping lending decisions from being based on medical information.

Steps toward erasing medical bills from credit reports have already begun, but the new rule would eliminate them entirely.

In 2023, unpaid medical bills with a starting balance of less than $500 were removed from reports. In 2022, paid medical collections were erased from credit reports.

As for exceptions to …