Early on in January 2025, the CFPB announced that medical collections will no longer be reported on credit reports.

A medical bill that is racked up while a person is undergoing a medical emergency, can be detrimental to the persons credit. Later, when said person tries to apply for a mortgage or new credit lines, they may be refused. But the medical bill should not determine whether the consumer can afford a proper credit line or not.

“People who get sick shouldn’t have their financial future upended,” as quoted from CFPB Director -Rohit Chopra.

This rule will remove $49 billion in medical bills from credit reports, says the CFPB. The rule will be in effect approximately 60 days from the day the rule was passed.

Does this rule apply to all states?

The new rule is applicable to all states in America. New York and New Jersey already banned medical collections from credit reports a few months back. But now, medical collections will be removed from credit reports all over the states.

Is the rule only for new medical collections?

The rule is affective for both old and new medical collections. The old medical collections which are already reporting on consumers credit reports, will be removed as the rule goes into effect.

And new medical collections will not be reported.

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