New rules will ban medical debt from your credit report.

A new government rule will remove $49 billion in medical debt from over 15 million Americans’ credit reports, impacting their credit scores positively. Lenders will no longer consider medical debt when making decisions about mortgages or car loans. The change is expected to raise affected consumers’ credit scores by an average of 20 points and could lead to 22,000 additional mortgage approvals annually. The rule aims to provide economic opportunities to those who have faced medical emergencies and struggled with medical bills, benefiting millions of households. This move follows findings that medical bills are poor predictors of loan repayment ability and often contain errors, leading to the exclusion of medical debt from credit reporting by major agencies.