The Consumer Financial Protection Bureau (CFPB) will roll out rules to prevent medical debt from appearing on credit reports, The Washington Post reported.

“This is going to be an enormous relief for so many people battling bills when it comes to medical visits,” CPFB director Rohit Chopra said on ABC’s Good Morning America. “Our research shows that medical bills on your credit report aren't even predictive of whether you'll repay another type of loan. That means people's credit scores are being unjustly and inappropriately harmed by this practice.”

The CFPB’s research estimates that the new rule would allow 22,000 more people to get approved for safe mortgages each year. Lenders could also benefit from the positive impact on peoples’ credit scores by being able to approve more borrowers, ABC reported.

Approximately 15 million Americans have medical bills on their credit reports, according to a study released in April by the CFPB and cited by the Post. In March 2022, the CFPB found that medical bills appeared on about 43 million credit reports. but major credit bureaus voluntarily adopted limits on which medical bills were included in reports. People affected by medical debt disproportionately live in the South or in low-income communities, according to the CFPB.

Medical debt “can lead to other kinds of financial vulnerability,” wrote Cynthia Cox, vice president at KFF, a nonpartisan health-care research organization that has analyzed medical debt, in a text message to the Post. “It’s a difficult cycle for people to pull themselves out of, especially at a time when they may be sick and less able to work.”

The proposed rules “can have a meaningful effect,” said Neale Mahoney, a Stanford University economist who has studied medical debt and served on the White House National Economic Council before leaving a year ago. Medical debt affects the credit scores of at least 5 percent of Americans, the Urban Institute found.

Citing his own research, Mahoney said that many people who carry medical debt also “have other flags on their credit report” that can make it hard for them to get loans even when medical debt is addressed. “Once you already have a bunch of derogatories—a technical term—on your credit report, having one removed, or even a handful removed, is not going to make a big difference in your credit score,” he said.

Sen. Bernie Sanders (I-Vt.) recently proposed legislation that would eliminate all existing medical debt and impose restrictions to limit future medical debt.

Earlier this year, New York City Mayor Eric Adams announced that the city would buy up millions of dollars of medical debt and erase it in a program that officials hoped would ultimately help as many as 500,000 New Yorkers, The New York Times reported. The District of Columbia announced a similar plan in March, the Post reported.