Medical bills will no longer be included on credit reports under a rule finalized by the Consumer Financial Protection Bureau.
Four things to know:
1. The rule prohibits lenders from considering medical information when making lending decisions and bans consumer reporting agencies from including medical debt information on credit reports and scores, according to a Jan. 7 news release from the agency.
2. The CFPB said medical debt is a poor predictor of a borrower's ability to repay loans, noting that many consumers receive inaccurate bills or charges that should have been covered by insurance.
3. The rule is expected to remove approximately $49 billion in medical bills from about 15 million Americans' credit reports. The CFPB also projects it will result in the approval of about 22,000 additional mortgages annually and raise credit scores by an average of 20 points for those affected.
4. The rule is effective 60 days following publication in the Federal Register.