How Removing Medical Debt From Credit Reports Could Shape the Housing Market
In a groundbreaking move, the Biden-Harris administration has announced a final rule that will eliminate medical debt from consumer credit reports, potentially changing the financial landscape for millions of Americans. Here’s what this means for homebuyers and the housing market:
A Credit Score Boost for Millions
• Medical debt will no longer appear on credit reports, raising the average credit score by 20 points for over 15 million Americans.
• This boost could result in the approval of an estimated 22,000 additional mortgages annually, making homeownership more accessible for families previously held back by medical debt.
Easier Loan Approvals
• By removing medical debt, lenders can now better evaluate applicants based on their ability to manage long-term debts like mortgages.
• This shift aligns with research showing that medical debt is a poor predictor of financial behavior, often stemming from unexpected emergencies rather than fiscal irresponsibility.
Impacts on Housing Affordability
• For many families, a higher credit score means better mortgage terms, such as lower interest rates and reduced monthly payments.
• However, with rising home prices and tight housing supply, new buyers entering the market could increase competition for affordable homes.
A Step Toward Financial Fairness
This policy builds on efforts by the administration to reduce the burden of medical debt, including federal programs that have already eliminated over $1 billion in debt for hundreds of thousands of Americans. By 2026, initiatives are expected to relieve up to $7 billion in medical debt for nearly 3 million people.
What Does This Mean for You?
If your credit has been impacted by medical debt, this rule might open doors to homeownership or better loan terms in 2025. But navigating these opportunities still requires smart financial planning—and that’s where I come in.
As a seasoned mortgage and healthcare broker, I can help you take advantage of these changes, secure the best rates, and make informed decisions about your future. KC Stark Mortgage Broker
📞 Contact me, KC Stark, today.
Let’s work together to turn these changes into opportunities for you and your family!
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