CFPB to Remove Medical Debt from Credit Reports

Mark Hake

The Consumer Financial Protection Bureau (CFPB) announced on Sept. 21 that it wants to take medical bills off your credit report.

The CFPB said it was starting a rule-making process to make that happen. They said they have three goals:

  • to help families financially recover from medical crises
  • to stop debt collectors from forcing people to pay bills they might not owe
  • to make creditors not use data plagued with inaccuracies and mistakes.

The CFPB claims that there is research showing that medical bills can't help predict credit value. In other words, creditors shouldn't rely on the fact that some people have large medical bills they may not be able to pay on time.

According to Reuters, medical billing data is a poor indicator of whether consumers are likely to pay down traditional debts.

Millions of Americans Affected by Medical Debt

They also have research that shows that about 20% of people have medical debt on their credit reports.

So this rule could have a far-reaching effect on many people. Moreover, Vice President Harris said that 100 million Americans have unpaid medical debt.

Moreover, there is a racial element. Reuters reports that 27% of Black households hold medical debt compared with 16.8% of non-Black households.

This is part of a move by the Biden Administration to stop coercive tactics by debt collectors.

Credit Agencies Already Eliminate Paid Medical Debt

One problem with the CFPB's latest move is that the three major credit agencies already eliminate from credit reports medical debt that has been paid.

This is even if the prior medical debt was in collection for having not been paid on time.

That move was announced last year in mid-March 2022 by the three agencies, Equifax, Experian, and TransUnion.

At the time, the three agencies said that this would remove 70% of medical debt starting in July 2022. So that calls into question the 100 million Americans with unpaid medical debt statistic quoted by the Administration. If that figure came from before 2022, the new number is likely to be much lower.

Moreover, starting in 2023, the three agencies agreed to not report medical debt that was less than $500, according to the Wall Street Journal.

However, the CFPB argues that medical debt accounts for 58% of all debt amounts that are in third-party collection. That is why they are pursuing the remaining amount that still gets reported to credit reporting agencies, including the amounts that are unpaid and in third-party collection.

The bottom line is that the CFPB is looking to start a new rule-making process to eliminate medical debt from being reported to credit agencies.


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Mark R. Hake, CFA, writes articles on national and local news, stocks, and market events at,,, and as well as TalkMarkets.

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Mark Hake is a financial analyst, investor, and Chartered Financial Analyst (CFA). He writes about US and foreign stocks as well as cryptos, hedge funds, and private equity. He previously ran his own hedge fund, investment research firm, and acted as CFO for a fintech startup. He focuses on finding value, arbitrage, and hidden asset opportunities.

Phoenix, AZ

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