Has a hospital bill ever ruined your credit score? That could be about to change. In an unexpected but well-received turn, the federal government has approved a rule that removes medical debt from credit reports. This historic measure was adopted by the Consumer Financial Protection Bureau (CFPB) in early 2025.
The reason is clear: nobody should pay with their future for having been sick. No more mortgage rejections because of appendicitis. No more impossible interest rates because of a workplace accident.
CFPB wants your health to stop being a financial threat. Because getting sick isn't the same as spending recklessly.
Relief for millions of Americans
According to official estimates, more than 15 million people could see an increase of up to 20 points in their FICO score. Although it may sound small, those points can make the difference between a "no" and a "yes" when applying for a loan or an apartment.
In addition, it's estimated that around 22,000 people per year could finally qualify for a mortgage that was previously denied to them.
Medical debt behaves differently from the rest. It's often full of errors, missing information, and duplicate payments. In many cases, patients don't even know exactly what they owe, and collectors use it as leverage.
With this measure, it is acknowledged that health shouldn't be used as a tool for financial punishment.
But not everything is decided
Although the rule was approved, it hasn't taken effect and its future is in doubt. The current administration, under Republican leadership, has taken an opposing stance. The new CFPB leadership has joined the financial industry in a lawsuit to block the rule.
A court in Texas has already halted its implementation, postponing any changes until at least July 28, 2025. Even then, there's no certainty it will move forward. Congress could also intervene and revoke the measure before it takes effect.
It's a legal and political battle. What's at stake isn't just a line on your record, but how credit is understood in the U.S.
So what can you expect now?
For now, everything remains the same. If you have medical debt, it will still appear on your credit report. Banks, employers, and landlords can still see it and make decisions based on it.
However, this new rule has started an important debate. Should credit reflect our financial decisions... or our medical emergencies?
If the rule survives, it won't cancel your debts, but it could give you something invaluable: a second chance. One where your record isn't marked by an emergency room visit, but by how you actually manage your money.