The Biden administration is making a significant change that could alleviate the financial burden of many Americans. According to reports, the administration plans to ban medical debt from credit reports.
This move comes as part of President Joe Biden’s efforts to provide relief and support for struggling Americans. With this sweeping change, individuals will no longer see their credit scores impacted by medical debt. This means that people with outstanding medical bills will not have difficulty obtaining loans or securing better interest rates on credit cards and mortgages.
Medical debt has been a major issue for Americans, with studies showing that it is the leading cause of bankruptcy in the country. According to a report from CNBC, over half of all collection items on credit reports are related to medical debt.
The ban on medical debt reporting will be implemented by the Consumer Financial Protection Bureau (CFPB). The agency has stated that it will require credit reporting companies to remove existing medical debt from credit reports and prevent any future medical debts from being reported.
The CFPB also plans to introduce new rules for how medical debt is reported in the first place. This includes providing more time for individuals to resolve outstanding medical bills before they are reported to credit bureaus.
The impact of this change is expected to be significant, with the potential to improve the credit scores of millions of Americans. It will also provide much-needed relief for those struggling with medical debt, which can often be overwhelming and difficult to pay off.
In addition, this move aligns with President Biden’s focus on healthcare and addressing issues that disproportionately affect low-income individuals and communities of color. With the ban on medical debt reporting, the administration is taking a step towards creating a fairer financial system for all Americans.
The CFPB has stated that it will release more details about these changes in the coming weeks.
Source: Newsbreak News
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