LAS VEGAS (KTNV) — For millions of Americans burdened by medical debt, financial relief is finally on the horizon.
A groundbreaking rule from the Consumer Financial Protection Bureau will eliminate medical debt from credit reports starting March 17, potentially giving millions a fresh start.
Medical debt has long been a leading cause of financial hardship, with millions of Americans struggling under its weight. For Las Vegas resident Maggie Guay, the change is life-altering.
"I finally get a chance to have some credit again," said Guay, who is carrying $70,000 in medical debt after undergoing a heart procedure last year.
What she initially thought was a ruptured hernia turned out to be a severe heart condition requiring immediate intervention. Though the procedure saved her life, the resulting bills devastated her finances.
"My credit score is below 500," Guay shared. "I can’t get a car. I have to rely on someone else’s name to rent or apply for a credit card.”
Under the previous policy, medical debts exceeding $500 could stay on credit reports for up to seven years, dragging down credit scores and limiting financial opportunities.
The new CFPB rule is expected to remove an estimated $49 billion in medical debt from credit reports nationwide. According to the bureau, Americans affected by the change could see their credit scores rise by an average of 20 points.
"Now with this new ruling, medical debt will no longer be reported to the credit bureaus," said Monique White, cead of community at Self Financial. "This is a great win for consumers."
While the removal of medical debt is a major step forward, White emphasized that rebuilding financial health requires additional effort.
"People need to take this opportunity to focus on their credit," White advised. "Check your credit report to ensure everything is being reported accurately. Call your medical provider to stay on top of any remaining balances—even though they’re no longer reported to credit bureaus, it’s still important to manage them. And add positive trade lines to your credit report by making on-time payments and managing debt responsibly."
White encourages consumers to follow the "CCP Method"—check your credit report, call your medical provider, and add positive trade lines.
For individuals like Guay, the new rule offers hope for financial recovery.
"I’m all for it," Guay said. "This really helps."
The "CCP Method" for improving your credit score involves three key steps:
- Check your credit report to ensure all information is accurate and up-to-date.
- Call your medical provider to manage and stay on top of any outstanding medical balances.
- Post positive trade lines by making on-time payments and responsibly managing your debts to improve your credit score.
