NerdWallet's Smart Money Podcast Does Medical Debt Impact Your Credit Score? And How Much Do You Really Need To Save for a Home
Jul 31, 2025
In this engaging discussion, Rohit Chopra, former director of the Consumer Financial Protection Bureau, sheds light on how medical debt impacts credit scores and the recent legal changes affecting borrowers. He emphasizes the importance of consumer protection and shares practical tips for managing medical debt. Later, housing expert Kate Wood discusses smart saving strategies for first-time homebuyers, debunking the 20% down payment myth and highlighting the necessity of understanding closing costs and down payment assistance programs. Get ready to rethink your financial approach!
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Medical Debt Harms Credit Scores
- Medical debt on credit reports often unfairly penalizes consumers even when the debt is valid.
- The CFPB found medical debt isn't predictive of one's ability to repay major loans like mortgages or auto loans.
Protect Yourself From Medical Debt
- Check your credit reports regularly if you have medical debt to catch errors or debts not owed.
- Utilize state insurance commissioners to help resolve insurance claim issues to avoid financial fallout.
Prioritize Emergency Savings First
- Build a solid emergency savings fund of three to six months' expenses before heavily saving for a down payment.
- Avoid depleting your emergency fund when saving aggressively for a house to prevent financial vulnerability.