Medical Debt Could Negatively Impact Your Credit Score
- Bob Brooks
- Aug 5
- 1 min read
In January 2025, the Consumer Financial Protection Bureau (CFPB) created a rule that removed medical debt from consumer credit reports. The Bureau argued that medical debt is often “incurred unexpectedly" and not a direct reflection of an individual's creditworthiness. Unfortunately, a federal judge in Texas vacated this rule stating that the CFPB had overstepped its authority under the fair credit reporting act.
As a result of the judge's decision, medical debts can show up on credit reports and negatively affect credit scores. The CFPB does maintain a few victories.
1st, the three major credit bureaus cannot report any medical debt that is under $500. In addition, the three major credit bureaus cannot report any medical debt that is not at least 360 days past due.
That is a good news/ bad news rule. It is good that they wait 360 days. It is bad if a debt that has been owed for over a year all the sudden shows up on your credit report
The bigger question is how in the world is the Consumer Financial Protection Bureau overstepping their bounds? They are simply protecting the consumer. It feels like there is a little politics involved…
Bob Brooks
Comments