California Attorney General Rob Bonta has issued a consumer alert, informing residents that it is now illegal for most forms of medical debt to appear on credit reports. This development follows the implementation of Senate Bill 1061 (SB 1061), authored by Senator Monique Limón and sponsored by Attorney General Bonta, which took effect on January 1, 2025. The bill aims to protect consumers from having their credit affected by medical debt.
Attorney General Bonta stated, “California banned medical debt from appearing on credit reports because we recognized this practice as harmful, unnecessary, and hurting the people already struggling the most. I am proud to have sponsored this law and now urge consumers to be aware of their new rights under California law to protect their financial future.” He emphasized the importance of regularly checking credit reports as a tool to prevent medical debt from affecting one's credit score.
Senator Monique Limón expressed pride in authoring legislation aimed at providing relief to Californians burdened by medical debt. She noted, “Now, with the federal government following California’s lead, consumers across the country will no longer be impacted by the effects of medical debt on their credit scores.”
Medical debt remains a significant issue nationwide, creating barriers to employment and housing. Individuals with such debt face challenges in securing rentals or mortgages and may experience hindered job opportunities due to employers' reliance on credit reports during hiring processes.
The Consumer Financial Protection Bureau (CFPB) has finalized banning medical bills from consumers' credit reports. In August 2024, Attorney General Bonta supported this federal rule through a letter sent to CFPB.
To ensure that medical debt does not appear on their credit reports, consumers are encouraged to check for inaccuracies or changes regularly. They are entitled to one free report per year from each of the three national bureaus: Equifax, Experian, and TransUnion. These can be requested via phone at 1-877-322-8228 or online at www.annualcreditreport.com/cra/index.jsp.
If medical debt is found on a report, individuals should notify the relevant parties—the medical provider’s office, debt holder, and credit agency—to remove it promptly. If issues persist despite notification, consulting legal aid or filing a complaint with Attorney General Bonta's office may be necessary.
For more information about ordering and correcting credit reports or addressing errors like identity theft or wrongful inclusion of medical debt, resources are available online.