Medical debt could soon be barred from ruining your credit score
NPR Online NewsSep 12, 2023
The Facts
The Biden admin. announced Thursday that the Consumer Financial Protection Bureau (CFPB) is considering barring consumer credit companies from including medical debt and collection information on individuals' credit reports.
According to the CFPB, 20% of Americans have medical debt on their credit reports, which can affect their ability to obtain mortgages, loans, and credit cards. The agency also found that 58% of all third-party debt collection on consumer credit reports was for medical bills.
The Spin
Narrative A
Medical debt, something no one deserves and often appears due to unforeseen accidents, shouldn't hinder people's ability to access financial services. If we want people to make money to repay their debt, then we shouldn't ruin the credit report that helps them grow financially in other aspects of their lives. Over 100M people are burdened by this debt crisis, so the government must step in to help this significant portion of the population.
Narrative B
While significant amounts of medical debt are certainly hurting some Americans, the fact of the matter is that such debt doesn't affect credit scores nearly as much as it used to. As medical debt is something financial agencies still use to assess prospective clients' creditworthiness, patients should make sure they make smart choices when assuming debt, such as not putting it on credit cards and reaching out to non-profit credit report organizations.