In California, It Remains Illegal for Medical Debt to Appear on Credit Reports: Attorney General Bonta Issues Consumer Alert

OAKLAND — California Attorney General Rob Bonta today issued a consumer alert reminding consumers, healthcare providers, and credit reporting agencies that in California it remains illegal for medical debt to appear on credit reports. Recently, the Trump Administration’s Consumer Financial Protection Bureau (CFPB) issued an interpretive rule claiming that federal law generally preempts state medical debt laws — it does not. 

“In California, it is illegal for medical debt to appear on your credit report. Medical debt — which the law generally defines as debt owed to a provider of medical services, products, or devices — is generally unforeseen; it is not a reliable predictor of credit risk and can make it harder for people who are already struggling to secure housing, a job, or a car to get to work," said Attorney General Bonta. "California banned medical debt from appearing on credit reports because we recognized this practice as harmful to struggling consumers and not helpful in determining creditworthiness. Let me be clear: This remains the law in California. I urge consumers to understand their rights and to regularly check their credit reports to ensure medical debt does not make an appearance. The California Department of Justice is committed to protecting and enforcing all of California's laws — including this one.”

California’s Law

Senate Bill 1061 (SB 1061), authored by Senator Monique Limón (D-Santa Barbara) and sponsored by Attorney General Bonta, went into effect on January 1, 2025, and protects consumers from having their credit ruined by medical debt appearing on credit reports. 

Nationally, medical debt continues to rise, creating significant barriers to employment, housing, and equitable access to healthcare. People with medical debt are more likely than those with student loans or credit card debt to report being denied a rental or mortgage, increasing their risk of homelessness or forcing them into substandard housing. Medical debt can hinder employment opportunities, as employers often rely on credit reports in hiring decisions, further complicating efforts to repay the debt. Many consumers also delay essential medical care due to financial burdens, which can result in worsening health conditions.  

Monitoring Your Credit Report 

The best way to ensure medical debt has not appeared on your credit report is by regularly checking your credit report for inaccuracies or changes. Consumers are entitled to one free credit report per year from each of the three national credit bureaus. Those bureaus are Equifax, Experian, and TransUnion. You have the option of requesting all three reports at once or staggering them. Checking your credit reports at least once a year is a good way to discover errors, like the inclusion of medical debt or even identity theft. These errors could raise your cost of credit or cut you off from credit. The sooner these errors are discovered, the easier they are to clear up.  

You can order your free annual credit reports through a toll-free phone number (1-877-322-8228), online, at www.annualcreditreport.com/cra/index.jsp, or by mailing the order form here to the following address: 

Annual Credit Report Request Service
P. O. Box 105281
Atlanta, GA 30348-5281

For more information on how to order, read, and correct your credit report, please visit here. 

If You Find Medical Debt on Your Credit Report 

If consumers find medical debt on their credit report, they should notify the medical provider’s office, debt holder, and credit agency to allow them an opportunity to quickly remove the information from their credit report. If the issue persists after providing notice to the medical provider, debt holder or credit bureau, consumers may consider consulting a private attorney or legal aid.

Consumers who find medical debt on their credit report can also file a complaint with the California Department of Justice at oag.ca.gov/report.