Marketplace All-in-One Medical debt and your credit: It's changing and we have an update
Jun 3, 2025
Explore the shifting landscape of medical debt and its impact on credit scores. The Consumer Financial Protection Bureau is reversing previous protections, sparking debate on the fairness of treating medical debt differently. A nonprofit is working to alleviate this burden by paying off debts for those in need. Legislative changes are underway, and there's bipartisan support for rethinking the rules. However, potential challenges loom, including a spending bill that might complicate access to health insurance.
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Medical Debt Is Unique
- Medical debt is fundamentally different because it results from illness, not discretionary spending.
- Credit scores fail to reflect the true likelihood of repayment for medical debt.
CFPB Shifts on Medical Debt
- The Biden-era CFPB rule removed about $50 billion in medical debt from credit reports.
- The new leadership at CFPB is rolling back enforcement and siding with debt collectors.
Medicaid Cuts Worsen Medical Debt
- Proposed Medicaid cuts totaling $715 billion will likely increase medical debt.
- The worsening credit impacts from medical debt will intensify without policy interventions.