September 23rd 2023.
At a recent press conference at Hampton University on Thursday, September 14, Vice President Kamala Harris shared some exciting news. She announced that the Biden administration has begun the process of removing medical bills from people’s credit scores. This move will create the opportunity to improve millions of ratings across America.
The Vice President listed drastic improvements that will come with the removal. It will make it easier for people who previously could not obtain home mortgages and auto loans. She also expressed that access to health care should be a right and not a privilege. “These measures will improve the credit scores of millions of Americans so that they will better be able to invest in their future,” Harris said.
The Associated Press reported that the announcement has been long-awaited since the Biden administration promised to minimize medical debt’s impact on creditworthiness scores. Last March, CFPB director Rohit Chopra said the credit reporting companies such as Equifax, TransUnion, and Experian would stop reporting “some but not all medical bills on an individual’s credit report.”
It is estimated that 20% of people report having significant medical debt. Director Chopra stated that “research shows that medical bills have little predictive value in credit decisions, yet tens of millions of American households are dealing with medical debt on their credit reports. When someone gets sick, they should be able to focus on getting better, rather than fighting debt collectors trying to extort them into paying bills they may not even owe.”
The proposal not only removes medical bills from credit reporting, but it also prohibits creditors from using medical bill information when judging loans and discourages coercive collection practices related to medical debt. In addition, mistakes and inaccuracies in medical billing are common. This is good news for many, especially for Black Americans, who could gain relief as medical debt is discharged from their credit reports.
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