23 Sep 2023 12:48 pm
(TND) — The Biden administration wants to stop medical debt from hurting Americans’ credit scores.
About 20% of U.S. households have medical debt, with about $88 billion in medical bills appearing on credit reports, the bureau said last year.“Research shows that medical bills have little predictive value in credit decisions, yet tens of millions of American households are dealing with medical debt on their credit reports,” CFPB Director Rohit Chopra said in a news release. “When someone gets sick, they should be able to focus on getting better, rather than fighting debt collectors trying to extort them into paying bills they may not even owe.”The proposed changes would remove medical bills from consumers’ credit reports and stop creditors from relying on medical bills for underwriting decisions, the bureau said.
And the scoring models may underestimate the creditworthiness of people who owe medical debt in collections.
This move seems well-intentioned and could help a lot of people, said Ted Rossman, a senior industry analyst at Bankrate.
“I think a key point is that this is different from, let's say, a credit card or a car loan or a mortgage, because you're often not willingly signing up for medical debt,” he said. “It can be some sort of literally life-or-death kind of emergency.”
He said comparing medical debt to something like credit card debt is like “apples to oranges.”The proposed changes wouldn’t absolve you of the medical debt, Rossman said.
His advice is to sort out a payment plan with the doctors or hospitals, which may be willing to come up with a low- or no-interest arrangement to resolve the debt over several years.
Despite potential concerns from hospitals, Rossman said he doesn’t see this becoming a “get out of jail free card” for people with medical debt.Rossman said there’s a good chance the proposed changes come to fruition.
The major U.S. credit reporting companies — Experian, Equifax and TransUnion — have already stopped counting paid medical debt against credit scores, and they started giving people longer to resolve delinquent medical debt before reporting it.
“I see the wind blowing in this direction already,” Rossman said
——
I haven’t liked a President as much since Ronald Reagan.
Joe is on our side.
**** those Republicans up their ***, Joe!
We need to buy Hunter two laptops.
About 20% of U.S. households have medical debt, with about $88 billion in medical bills appearing on credit reports, the bureau said last year.“Research shows that medical bills have little predictive value in credit decisions, yet tens of millions of American households are dealing with medical debt on their credit reports,” CFPB Director Rohit Chopra said in a news release. “When someone gets sick, they should be able to focus on getting better, rather than fighting debt collectors trying to extort them into paying bills they may not even owe.”The proposed changes would remove medical bills from consumers’ credit reports and stop creditors from relying on medical bills for underwriting decisions, the bureau said.
The CFPB previously found that people may be overly penalized on their credit scores for medical debt that goes into collections.“These measures will improve the credit scores of millions of Americans so that they will better be able to invest in their future,” Vice President Kamala Harris said during a press call.
And the scoring models may underestimate the creditworthiness of people who owe medical debt in collections.
This move seems well-intentioned and could help a lot of people, said Ted Rossman, a senior industry analyst at Bankrate.
“I think a key point is that this is different from, let's say, a credit card or a car loan or a mortgage, because you're often not willingly signing up for medical debt,” he said. “It can be some sort of literally life-or-death kind of emergency.”
He said comparing medical debt to something like credit card debt is like “apples to oranges.”The proposed changes wouldn’t absolve you of the medical debt, Rossman said.
His advice is to sort out a payment plan with the doctors or hospitals, which may be willing to come up with a low- or no-interest arrangement to resolve the debt over several years.
Despite potential concerns from hospitals, Rossman said he doesn’t see this becoming a “get out of jail free card” for people with medical debt.Rossman said there’s a good chance the proposed changes come to fruition.
The major U.S. credit reporting companies — Experian, Equifax and TransUnion — have already stopped counting paid medical debt against credit scores, and they started giving people longer to resolve delinquent medical debt before reporting it.
“I see the wind blowing in this direction already,” Rossman said
——
I haven’t liked a President as much since Ronald Reagan.
Joe is on our side.
**** those Republicans up their ***, Joe!
We need to buy Hunter two laptops.