German YusufovMay 19, 2025

Medical debt can pile up fast, often from a single emergency room visit or unexpected procedure. At Yusufov Law Firm, PLLC, we’ve helped individuals and business owners across Tucson, Mesa, and Phoenix find relief when debt becomes unmanageable.

Now, new rules from the Consumer Financial Protection Bureau (CFPB) could bring real changes to how medical debt affects your credit.

In this article, we’ll explain what the CFPB’s new guidelines mean for Arizona residents and how they may help protect your financial future. Whether you’re already facing medical bills or planning ahead, this information can help you take control with confidence.

What the New CFPB Rule on Medical Debt Actually Means

If you’ve ever had a medical bill land on your credit report even if you weren’t sure you owed it, you’re not alone. Millions of Americans have been there. The CFPB recently finalized a rule that aims to change this in a big way.

Medical Bills to Be Removed from Credit Reports

One of the biggest parts of the new rule is simple but powerful: consumer reporting agencies like Equifax, Experian, and TransUnion can no longer include medical debt on credit reports that lenders see. That means unpaid hospital bills, lab fees, and similar debts won’t drag your credit score down when you apply for a mortgage or car loan.

According to CFPB data, this change could wipe nearly $49 billion in medical debt off credit reports for around 15 million people. That’s a major shift.

Privacy Protection and Ending Coercion

This new rule also aims to stop debt collectors from using credit reports as leverage to force payments. People often pay questionable or incorrect bills just to clean up their credit—this rule is designed to reduce that kind of pressure.

It also strengthens your privacy. Lenders can no longer see medical information they don’t need, which adds a layer of protection during sensitive times.

Medical Debt Isn’t a Good Predictor of Risk

The CFPB made this move because research showed that medical debt doesn’t predict whether someone will repay a loan. It’s often tied to emergencies or billing mistakes, not financial irresponsibility. By scrubbing it from credit decisions, lenders will have a clearer and fairer view of your actual risk.

A Closer Look at the Rule’s Key Changes

The CFPB didn’t just slap a bandage on the problem. They made real changes to how medical debt is handled under federal lending and credit reporting laws.

No More Using Medical Info in Lending Decisions

For years, there was a loophole that allowed creditors to use certain medical information when reviewing loan applications. That loophole is now closed. Lenders can’t factor in the presence of a medical device or any treatment-related detail when deciding to approve or deny a loan.

They’re also banned from using medical equipment, like a CPAP machine or wheelchair, as collateral for a loan. You should never have to risk your health just to get approved for credit.

Credit Reports Must Stay Free of Medical Debt

Under the new rules, credit bureaus must leave medical bills out of reports that go to lenders. So, if you’re applying for a mortgage, car loan, or credit card, those old emergency room bills shouldn’t follow you around.

There are a few exceptions. Lenders can still ask about certain medical details in very limited cases—for example, if you’ve requested a medical forbearance or some other benefit tied directly to your health.

But overall, this rule is meant to take the pressure off borrowers and stop the credit system from being used as a tool to collect money unfairly.

What This Means for Arizona Residents

Here in Arizona, we know medical costs hit hard. Based on data from the Urban Institute, the median medical debt in collections for Arizonans is among the highest in the country. That’s not just a statistic—it’s something we hear about every week from our clients.

Credit Scores Could Get a Boost

If you’ve been dealing with medical bills on your credit report, you could see a real improvement in your score once those accounts are removed. This matters when you’re applying for a loan, renting an apartment, or even applying for a job.

Easier Access to Home Loans

Higher credit scores can also mean better chances of getting approved for affordable mortgages. For first-time buyers in Phoenix, Tucson, or smaller towns across the state, this could open doors that felt closed just a year ago.

Supports Arizona’s Own Debt Collection Laws

Arizona passed the Predatory Debt Collection Act in recent years to protect consumers from abusive practices. The CFPB’s new rule complements this law by tackling the credit side of the problem—making sure collectors can’t weaponize credit scores to force payments on disputed or inaccurate debts.

What Counts as Medical Debt Under This Rule?

There’s still a little confusion about which types of bills are actually covered. Here’s the short version:

Covered: Bills From Healthcare Providers

If you owe money directly to a doctor, hospital, lab, or their billing company, that’s likely considered medical debt under the rule. These are the kinds of accounts being removed from credit reports.

Not Covered (for now): Medical Credit Cards

Debt owed to third-party lenders, like credit cards used for a dental procedure or a surgery loan through a financing company, may not be protected under the new rule. The CFPB is still reviewing how to handle these situations, but for now, they could still show up on your credit report.

That’s why it’s still important to look closely at any financing you sign up for. Not all “medical” debt is treated equally under the law.

Possible Roadblocks and Uncertainty

As promising as this rule sounds, not everyone is cheering.

Industry Pushback

Some banks and credit reporting agencies aren’t thrilled about the changes. There’s already talk of legal challenges that could delay or weaken parts of the rule. The financial industry has deep pockets and strong lobbying power.

Political Shifts Could Change the Landscape

Let’s be real: rules like this can shift with the political winds. While the CFPB is moving forward now, future administrations or court decisions could put these protections at risk. So, while the outlook is positive, it’s smart to stay informed.

Struggling with Medical Debt in Arizona? Here Are Your Options

Even with this rule, medical debt won’t just disappear from your life. If you’re drowning in bills or facing aggressive collectors, you still need a plan.

Here are a few steps to consider:

  • Ask for an itemized bill – You’d be surprised how many charges are incorrect
  • Apply for financial assistance – Many hospitals offer programs, but you have to ask
  • Negotiate the amount – Billing departments often have room to reduce your total if you show hardship

Bankruptcy Is Still a Powerful Tool

If your medical debt is part of a bigger financial mess, bankruptcy may be the best way forward. At Yusufov Law Firm, we help Arizonans stop wage garnishments, end harassing calls, and prevent home foreclosure.

Bankruptcy isn’t the end, it can be a fresh start. Whether you’re a small business owner or just trying to get your household back on track, we can walk through your options and find a plan that fits.

Yusufov Law Firm Can Help You Take the Next Step

Medical bills shouldn’t take away your peace of mind. At Yusufov Law Firm, we offer clear, compassionate guidance to help you protect your home, your car, and your future. If you’re feeling overwhelmed, call us in Tucson at (520) 745-4429 or in Mesa/Phoenix at (480) 788-0098. You can also reach out through our online Contact Us page. We’re here to listen, explain your options, and help you take the next step with confidence.