Vice President Kamala Harris Announces Plans To Remove Medical Debt From Credit Scores

Vice President Kamala Harris shared some good news at a recent press conference at Hampton University on Thursday, September 14. She said that the Biden administration has begun the process of removing medical bills from people’s credit scores. The move will create the opportunity to improve millions of ratings across America.

Harris listed drastic improvements that would come with the removal. It would make it easier for people who previously couldn’t obtain home mortgages and auto loans. Vice President Harris announced that the Consumer Financial Protection Bureau has already begun the rulemaking process to make the change official.

“Access to health care should be a right and not a privilege,” Harris expressed. “These measures will improve the credit scores of millions of Americans so that they will better be able to invest in their future.”

According to the Associated Press, 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.”

An estimated 20% of people report having significant medical debt.

“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,” Director Chopra said. “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 inclusion of medical debt can be problematic in practice as well because “mistakes and inaccuracies in medical billing are common.”

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.