Medical debt being banned from credit reports | 'A huge win for patients'

$49 billion, that's the amount of unpaid medical bills that will soon be removed from millions of credit reports. NBC10's Bianca Beltran joining us now of what this could mean for you. Bianca. Well, Tracy, medical debt is largely taken on unexpectedly in a time of crisis and those unpaid bills have led to people being denied loans and getting lower credit scores. Now, this change that we're talking about aims to prevent people from being penalized for bills More than 15 million Americans could see medical debt removed from their credit reports under a new rule finalized by the Consumer Financial Protection Bureau Tuesday. Getting rid of medical debt on credit reports is a huge win for patients. Kind of absurd that this has been around for so long, so I'm extremely excited. As a result, consumers could see their credit scores rise an average of 20 points and lenders will no longer be able to factor medical debt in their lending decisions. If you do put a health care expense on a credit card, it is no longer a medical debt. Don't just ignore your bills. Just because this ruling came out, this can still damage you. People can still come after you. According to CFPB research, a medical bill on a credit report contributes to thousands of denied applications on mortgages. The agency says the rule will lead to the approval of nearly 22,000 additional mortgages every year. Going to change people's behavior in a way that they're able to move on with their lives and not be so frustrated by a sickness and be haunted by a sickness that they had at one point or chronic illness. This is just the latest decision in medical debt relief. In 2023, the three largest credit reporting agencies announced that they would take certain types of medical debt off credit reports, including collections under $500. The rule will also increase privacy protections and prevent debt collectors from using the credit reporting system to coerce people to pay bills they don't owe. When we get a medical bill waived for someone, the impact is immediate. We have people that have been able to graduate college because their medical bill was relieved, to purchase a home, to get a car, to, you know, all of these different things to save money. So what do you do with this news? We're going to want to make sure to make sure that those unpaid medical bills that do not appear on your credit report. Now, the good news is you can get a credit report every week for free, and here's how it works. Go to annualcreditreport.com, and there you can request to get your report from one or all three big credit bureaus. Now, the whole process should take less than 10 minutes, and you'll want to look for any errors or accounts that you don't recognize. Take the time to do this to make sure a medical emergency or mistake doesn't hurt your credit. I'm Bianca Beltran, NBC 10 Boston.