ON JANUARY 7, 2025, THE CONSUMER FINANCIAL PROTECTION BUREAU (“CFPB”) FINALIZED A RULE WHICH REMOVES MEDICAL BILLS FROM CREDIT REPORTS.
WHAT THIS MEANS FOR YOUR CUSTOMERS — ESPECIALLY TENANTS AND BUYERS:
On January 7, 2025, the CFPB finalized a rule that will remove approximately $49 billion dollars in medical bills from credit reports for an estimated 15 million Americans.
If this new rule goes into effect, it would prohibit lenders from using medical debt information to make lending decisions, because the information is often inaccurate.
CFPB research revealed that an individual’s ability to repay their medical bills is a “poor predictor” of their ability to repay other loan types. The research further revealed that medical debt led to thousands of denied mortgage applications.
This rule now aligns with the 2022 Congressional No Surprises Act that protects individuals from unexpected medical bills; and the 2023 actions of the three nationwide credit bureaus (Equifax, Experian, and Transunion) which announced that any medical bill under $500 should not appear on an individual’s credit report.
Most notably, the CFPB expects credit scores to rise, on average, 20 points. The CFPB further anticipates that this rule will lead to the approval of approximately 20,000 additional mortgages each year for consumers currently burdened by medical debt.
The rule was expected to go into effect March 17, 2025, however a federal district court has stayed the effective date until June 15, 2025. There will be a hearing on the Plaintiff’s Motion for Preliminary Injunction on May 12, 2025. Of course, the MIAMI REALTORS’ Legal team will report back on where this rule stands.
In the meantime, if there is an error on a credit report that impacts your customers ability to close on a home, qualify for a mortgage, or rent a home, read below on how to help guide them.
HOW TO CHECK CREDIT REPORTS FOR FREE:
- By law, you are entitled to receive an annual free credit report from the three nationwide credit bureaus (Equifax, Experian, and Transunion).
- Only annualcreditreport.com is authorized to issue free annual credit reports from the three bureaus. There are three ways to make your request:
- Online: AnnualCreditReport.com
- By phone: 1-877-322-8228
- By mail: You must submit this form by mail to Annual Credit Report Request Service PO Box 105281, Atlanta, GA 30348-5281
- For additional information on how to access your credit report please visit: usa.gov/credit-reports
HOW TO DISPUTE ERRORS ON YOUR CREDIT REPORT:
- If you believe there is an error on your credit report, you can dispute the information with whichever credit bureau or reporting company you found the error.
- What will you need?
- A letter to the credit bureaus, reporting company, or both depending on your exact situation.
- The Federal Trade Commission has a sample letter to assist consumers (your customer), you can find it HERE.
- What should the letter include? According to the CFPB the letter should include:
- The requester’s contact information;
- the credit report confirmation number;
- the error or errors that need to be corrected including any identifying information (an account number, company name, etc.);
- an explanation of why the identified errors are being disputed;
- the actual removal request;
- a copy of the section of the credit report that contains the errors with the errors clearly marked (highlighted, circled, or underlined); and,
- lastly, copies of any supporting documentation which support your dispute.
- Where should I send it? To the credit reporting agency where the error appears.
- Equifax
- Online: equifax.com/personal/credit-report-services/credit-dispute/
- Phone: (866)349-5191
- Mail: Visit the link above for the company’s most recent address.
- Experian
- Online: experian.com/disputes/main.html
- Phone: (888) 397-3742.
- Mail: Visit the link above for the company’s most recent address.
- TransUnion
- When should I expect a response?
- Generally, 35-50 days. Credit reporting agencies must investigate within 30 days and notify the consumer of the results within 5 days of their results.
- Delays caused by the consumer during the investigative period can tack on an additional 15 days.
- Equifax
ADDITIONAL RESOURCES:
- Resources regarding your credit report:
- Sample Letters
DISCLAIMERS:
This page and all posts are meant to provide education and information on relevant legal topics facing the industry and are not a substitute for legal advice. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user, or browser. MIAMI REALTORS® does not recommend or endorse the contents of third-party sites. For legal advice or representation, contact private counsel or call the Florida REALTORS® Legal Hotline (1-407-438-1409). The information and materials on MIAMI REALTORS®’ website are provided for educational and informational purposes only and should not be construed as legal advice or as an offer to perform legal services on any subject matter. It contains general information and may not reflect current legal developments or information. Nothing is intended to create an attorney-client relationship and shall not be construed as legal advice. The information is not guaranteed to be correct, complete, current, or suitable. MIAMI REALTORS® makes no warranty, expressed or implied, about the accuracy or reliability of the information in this program or materials. Recipients of the information in this program or materials should not act or refrain from acting on the basis of any information without seeking appropriate legal advice on the particular facts and circumstances at issue from an attorney licensed in the recipient’s state. MIAMI REALTORS® expressly disclaims all liability with respect to actions taken or not taken by the recipient based on any or all of the information in this information and materials.
