Medical debt will be removed from credit reports: What this means for Americans [Video]

The Biden administration finalized a new rule this week preventing medical debt from being included in credit reports, as well as prohibiting lenders from using certain medical information in loan decisions.

This is slated to provide relief to millions of Americans whose credit reports or scores have been negatively impacted by unpaid medical bills. For context, about 46 million people had medical debt listed on their reports in 2020, according to the administration. 

Here’s what this rule means for Americans: 

When it takes effect, which is 60 days after publication in the Federal Register, $49 billion in unpaid medical bills will be removed from the credit reports of 15 million Americans, according to the Consumer Financial Protection Bureau (CFPB).

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The administration said this will ensure that patients are no longer denied access to credit for home mortgages, car loans or small business loans. 

About 22,000 additional affordable mortgages will be approved every year once …