WASHINGTON — The Consumer Financial Protection Bureau finalized a new rule Tuesday that bans medical bills from credit reports. 

The rule is intended to improve the credit scores of millions of Americans who have medical debt, helping them access car loans, home mortgages and small-business loans.

“No one should be denied economic opportunity because they got sick or experienced a medical emergency,” Vice President Kamala Harris said in a statement. 

Calling the rule “lifesaving for millions of families,” she noted that the Biden Administration canceled over $1 billion in medical debt for 700,000 people through the American Rescue Plan.

CFPB research from 2022 showed medical collections appeared on 43 million credit reports; 58% of bills in collection on individuals’ credit reports were medical debts, many of them the result of emergencies.

While consumers can expect their credit scores to be affected by mortgages, auto loans or credit cards, some argue that medical debt, often from emergency room visits, is taken on unexpectedly and is also frequently subject to insurance coding errors, such as duplicate charges or fees for services that were never given.

The CFPB expects the new rule to remove medical debt from the credit reports of 15 million Americans and to raise their credit scores by an average of 20 points.