On January 7, 2025, the CFPB finalized a rule that bans the inclusion of medical bills on credit reports used by lenders and prohibits lenders from using medical information in their lending decisions. According to the CFPB, the final rule will remove an estimated $49 billion in medical bills from the credit reports of about 15 million Americans.
The CFPB’s new rule amends Regulation V, which implements the Fair Credit Reporting Act (FCRA). The final rule:
Prohibits lenders from considering medical information. The rule ends the special regulatory carveout that previously allowed creditors to use certain medical information in making lending decisions. This means lenders will also be barred from using information about medical devices, such as prosthetic limbs, that could be used to require that the devices serve as collateral for a loan for the purposes of repossession.
Bans medical bills on credit reports. The rule bans consumer reporting agencies from including medical debt information on credit reports and credit scores sent to lenders. This will help end the practice of using the credit reporting system to coerce payment of bills regardless of their accuracy. Lenders can continue to use medical information to verify forbearances, assess medical expenses for loan purposes, consider certain benefits as income during underwriting, and for other legitimate purposes.
The CFPB's move comes after adjustments made by the three major credit reporting agencies who declared they would remove specific kinds of medical debt from credit reports. In addition, FICO and VantageScore, the two major credit scoring companies, announced they have decreased the degree to which medical bills impact a consumer’s score.
Read the CFPB’s press release here.
The final rule can be found here.