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15 million Americans have medical debt crushing their credit scores but that's about to end

This is great news for the millions of us with outstanding medical bills.

Millions of American families are trying to pay off medical bills that put them into debt.

A new proposed rule from the Biden administration could spell some relief for people with outstanding medical bills.

According to data collected by the Consumer Financial Protection Bureau (CFPB), 15 million Americans are carrying $49 billion in medical debt that shows up on their credit report, potentially having a negative impact on their credit score. A new rule banning medical debt from credit reports would change that.


In the U.S., people's ability to get approved for a car loan or a mortgage to purchase a house depends heavily on their credit score or FICO score. People with a strong credit history, who make payments on time and don't carry too much debt, will usually have a good credit score and an easier time being approved for loans with the best interest rates. A low credit score makes getting a loan more difficult or more expensive.

Unfortunately, circumstances out of people's control, like medical care that puts them thousands of dollars in debt, can negatively impact their credit score.

"Medical debt makes it more difficult for millions of Americans to be approved for a car loan, a home loan or small business loan, all of which in turn makes it more difficult to just get by, much less get ahead. And that is simply not fair," Vice President Kamala Harris told reporters via teleconference.

CFPB Director Rohit Chopra also shared that having medical debt is not a fair indicator of someone's true credit habits.

"Medical debt on a consumer credit report is a very different type of debt than a mortgage, an auto loan, or a credit card," Chopra explained. "Sometimes, as is the case with a visit to the emergency room, the debt is taken on unexpectedly and in a time of crisis. Medical bills are also frequently subject to coding errors, charity care mistakes, or complexities with insurance. A decade ago, the CFPB found that medical debts were overly penalizing consumer credit scores, and we have consistently found that medical billing data on a credit report is less predictive of future repayment than other debts."

Chopra also called out the predatory practices that have influenced credit reporting systems when it comes to medical debt, providing an unfair disadvantage to consumers.

"Some have seized on medical debts as a major moneymaking enterprise," he said. "These entities purchase medical debt, sometimes for pennies on the dollar, and they can cash out big by getting consumers to pay up on those debts. And one of the easiest ways they can do so is by threatening to park that medical debt on the credit report, where it might impede a consumer’s ability to get approved for a loan. In this way, the credit reporting system more closely resembles a weapon for debt collectors rather than a tool for lenders to assess someone’s likelihood to repay a loan."

Chopra also pointed out that the three big credit reporting agencies——Equifax, Experian, and TransUnion—voluntarily removed some medical debt from credit reports, only certain kinds. CFPB research found that although the number of Americans with medical debts on their credit report had decreased, the numbers were still substantial and disproportionately impact low-income Americans. Additionally, the average medical debt on credit reports had increased from $2,000 to over $3,100.

Vice President Harris said that this change would result in millions of Americans seeing a 20-point increase in their credit score on average, allowing for 22,000 more approved mortgages to buy a home. She also called on states, cities and hospitals to join the Biden administration in forgiving medical debt.

According to ABC News, the rule has been in the works since September and could go into effect early next year.


Realtor Freddie Smith shows the math of why millennials can't afford a house.

Does this conversation sound familiar?

Millennial: "Housing costs are ridiculous. And now mortgage rates are double what they were a few years ago. How am I supposed to afford to buy a house?"

Boomer: "You know what the interest rate was on my first house? Over 16%. I'd have loved to have a 7% interest mortgage!"

Millennial: "But you could raise a family on a single middle-class income when you were my age. That's just not possible now."

Boomer: "Well, maybe if you stopped buying avocado toast and Starbucks, you could afford a house."

Millennial: [blank stare]


Generational battles over economics aren't new, but some eras provide more fodder for such exchanges than others. Right now, it's the cost of housing that has younger people feeling stuck while older folks (or people who were lucky enough to land a house several years ago) are sitting pretty on the equity they've gained since the pandemic started.

Those of us who already own a house and aren't thinking of selling any time soon may not be fully aware of how drastically things have changed for those in the homebuying market. One realtor on TikTok shared a breakdown of the numbers, and it is eye-opening.

Watch this explainer from Freddie Smith:

@fmsmith319

Housing cost from 1995 vs 2019 vs 2023

Umm, yeah. It would take a truckload of avocado toast to even come close to making up for that increase. And these numbers are assuming you could even afford an $84,000 down payment. First-time homebuyers can often qualify for a 3% down loan, which makes it easier to get into the house but increases the monthly payment.

People in the comments commiserated, and many people asked what they were supposed to do in light of this reality. Some suggested buying land and putting a cheap mini-home on it until they had enough saved up to build a house. Others said to wait it out because the current market isn't sustainable and we may see a housing crash. (Though, as one commenter pointed out, "[In] 2019 we were told everything would crash but instead everything went up in record numbers.")

Some blamed the current administration, completely ignoring the global pandemic of the past three years that resulted in economic upheaval and ongoing fallout everywhere. The immediate housing market has always been somewhat unpredictable, and it's a crapshoot as to whether or not it's the best time to buy.

But when you can't even come close to affording it, it's a moot question anyway. Surely, something's got to give, but the question is what, when and how.

Smith has many, many videos showing the math behind the housing market. Follow him on TikTok for more.

All images provided by CARE & Cargill

The impact of the CARE and Cargill partnership goes beyond empowering cocoa farmers

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Cocoa, the key ingredient found in your favorite chocolate bar, has been a highly revered food product throughout human history. It’s been used for religious ceremonies in Peru, royal feasts in England and France, traded as currency for the ancient Mayans. And considering that many of us enjoy chocolate on a regular basis (mochas and candy bars, anyone?) it seems like that love is still going strong even today.

And if you are someone who looks forward to that sweet chocolate pick-me-up on a regular basis, you likely have the women of West Africa to thank.

Women like Barbara Sika Larweh, a mother of six who works as a cocoa farmer in Larwehkrom, a community located within the Sefwi Wiawso Municipality in the Western North Region of Ghana.

care, cargillMama Cash now empowers other women to gain independence

Nearly 60% of the world’s cocoa comes from both Ghana and Côte d’Ivoire, where Barbara and other mothers make up over half of the labor force. These female cocoa farmers shoulder the same physical burden as their male counterparts—all while also running households and paying for their children to go to school. And yet, they typically don’t receive equal income. Nor do they have access to the resources that could help them achieve financial independence.

Thankfully, positive changes are taking place. Barbara’s story exemplifies the impact of programs offered by CARE and Cargill, such as Village Savings and Loan Association (VSLA), which are small groups that offer low-interest loans to individuals living in poverty, helping them to build savings without going into devastating debt.

Through these initiatives, women, like Barbara, are equipped with vital knowledge like financial literacy to improve household incomes, sustainable agriculture practices that improve yields, and nutrition education to diversify their family’s diets.

“They came and trained me on the VSLA. I dedicated myself and volunteered so that I would be able to train my people, too,” Barbara explains.

Within the first year of using the programs, Barbara and the people she trained profited—earning her the nickname of “Mama Cash.”

This is no isolated event. In cocoa-growing communities supported by CARE and Cargill programming between 2019-2022, the number of households living below the national poverty line decreased by nearly 32% in Cote d’Ivoire and Ghana - as a direct result of increasing and diversifying income through using these programs.

Like Barbara, who today is an executive member of the Community Development Committee, more than 2.4 million women have used their success as entrepreneurs to transform into leaders and decision-makers within their communities. Whether it’s giving most of their earnings back to their families, reducing child labor, or exponentially increasing overall farm yields, the rippling effect is profound.

The impact of the CARE and Cargill partnership goes beyond empowering cocoa farmers. The joint initiatives have fostered progress on complex global issues related to social justice, such as gender equality, climate change, and food security. By improving access to quality nutrition, water, and hygiene, the joint programs have positively influenced the cocoa communities’ well-being.

Suddenly there’s a lot more to think about the next time you eat a candy bar.

Find out more about the important partnership between CARE and Cargill here.
Photo by Erik Mclean on Unsplash

Prices at the pump have dropped for more than two months straight.

When the summer of 2022 began, prices at the gas pump were pretty dire. Hitting a record nationwide average of $5.02 per gallon on June 14, gasoline became a bigger chunk of every family's budget and was particularly painful for people who had planned summer road trips to save over flying.

But since that peak, prices have steadily dropped to an average of $3.89 per gallon as of August 23. In fact, the price of gas has fallen every day for 70 days straight, which is the longest consecutive downward streak since January of 2015, according to Bloomberg. Prices vary by location, of course, but that prolonged drop is great news for our pocketbooks.

Why are prices dropping, though? It depends on who you ask.


The Biden administration has touted the president's policies for the price decline, but the reality is a lot more complicated. Every president is quick to take credit for lowering gas prices and every political opponent is quick to blame them for rising gas prices. Unfortunately, our penchant for partisan side-taking tends to push us to follow suit.

But presidents actually have very little control over gas prices or the factors that influence them. Global crude oil prices, which have the greatest influence on prices at the pump, are mostly out of a president's control.

“No administration really has a lot of sway over gas prices,” Andrew Gross, a spokesman for the AAA, told Factcheck.org. Severin Borenstein, faculty director of the Energy Institute at the Haas School of Business at UC Berkeley, told Politifact, “By far the biggest driver is the price of crude oil, which is driven by supply and demand factors. A strong global economy, which presidents can influence slightly, is likely to increase demand and drive up prices."

The global economy and crude oil prices have been affected by all kinds of things, from the COVID-19 pandemic driving down demand in 2020 to Russia's invasion of Ukraine in 2022, causing instability in the global energy market. President Biden has also released record amounts of oil from the Strategic Petroleum Reserve to try to mitigate the price spike, but gas prices have been up all over the world, and even with our prices remaining higher than average, our gas prices are still lower than most of the world.

The truth is complex. Lower gas prices are certainly good for our individual, immediate bottom line, of course, but focusing solely on our own savings ignores a host of other implications. For instance, higher gas prices can cause people to drive less, which is actually a positive for the environment. On the other hand, people who can't afford those higher prices but who have no choice but to buy gas suffer disproportionately from higher prices, making price fluctuations an equity issue as well. Sometimes low gas prices can be a bad sign, as was the case during the early months of the COVID-19 pandemic.

And despite the long streak of falling prices, industry experts and former government officials say that prices could go back up again. So for now, let's just say yay that prices have been falling for a while, celebrate saving some money and keep working on ways to lessen our dependence on oil and gas so these prices aren't as big a factor in our lives.