The Biden Administration wants to make credit card, mortgage, and other loan applications easier for Americans. To achieve this, the government plans to block medical debt from appearing on borrowers' credit reports.
Under Biden Admin, Credit Card, Other Loan Applications Are Easier
On Tuesday, June 11, the Biden Admin will formally propose new rules preventing medical debts on credit reports of Americans applying for loans, as reported by Fox Business.
The Consumer Financial Protection Bureau's proposed broad regulations for credit reports would apply to mortgages, credit cards, and other kinds of loans.
"Our research shows that medical bills on your credit report aren't even predictive of whether you'll repay another type of loan," said CFPB Director Rohit Chopra.
He added this practice of loan companies unjustly and inappropriately harms Americans' credit scores.
Credit Report Rules To Help Tens of Thousands
According to ABC News' latest report, the Consumer Financial Protection Bureau estimates that the new proposed rules would assist 22,000 additional Americans each year in safe mortgage applications.
Experts said that the new regulations will benefit borrowers and loan companies. More borrowers will be approved, which means more income for them.
Numerous credit report firms, including FICO, VantageScore, TransUnion, Experian, and Equifax, have already stopped using medical debts to calculate people's creditworthiness.
CFPB's proposal is a big deal for Americans since medical debt is estimated to impact two in five residents negatively. Once medical debts are included in their credit scores, they struggle to get a car, home, and other loans.
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