The Latest on Keeping Medical Debt Out of Credit Reports

(Published July 30, 2025; updated Sept. 3, 2025; Sept. 21, 2026)

About 15 million consumers have medical debt on their credit reports. It is controversial whether such bills should be included on credit reports because the medical debt is often unplanned, unavoidable, and unaffordable.  Study after study finds that medical debts have little to no predictive value as to whether a consumer will repay a debt.  In many cases, the consumer may not even owe the debt or the amount may be inaccurate; medical billing is particularly problematic given the complex interface with insurance.

State legislatures have responded to this criticism by adopting laws to ban or restrict medical debt on credit reports.  In addition, the Big Three credit bureaus (Equifax, Experian, and TransUnion) have taken voluntary actions to eliminate some medical debt. The credit bureaus are officially known under the Fair Credit Reporting Act (FCRA) as the nationwide consumer reporting agencies (CRAs). The Consumer Financial Protection Bureau (CFPB) attempted to ban medical debt from credit reports by rulemaking, but a federal district court in Texas struck down the rule.

This article brings readers up to date on the latest developments on all of these fronts.  It also discusses the critical question of whether the FCRA preempts state laws restricting medical debt on credit reports.

Credit Reporting Agencies Voluntarily Limit Reporting of Medical Debt

In 2022, nationwide CRAs agreed to three changes to reduce the amount of medical debt in credit reports:

1. Refraining from including medical debt in credit reports if the debt is less than one year delinquent;
2. Removing paid medical debt from credit reports, so that there would be no indications that these debts were ever in default;
3. Omitting any medical debt under $500 on credit reports. Medical debts under $500 will never be reported even if unpaid and even if in collection.  This change took effect in the Spring of 2023.

The nationwide CRAs also continue to offer free credit reports once a week instead of once a year as required by the FCRA. Consumers should regularly order a free report from each of the nationwide CRAs to ensure that the CRAs are complying with these voluntary policies and with the state limits described below. Importantly, one should obtain a free credit report from the central source and not by opening an account with an individual CRA that might require the applicant to agree to mandatory arbitration of any dispute they have with the CRA. 

Consumers can obtain the report from the central source in any of these ways: 

• Order online at www.annualcreditreport.com/index.action;
• Call 877-322-8228; or
• By mail: go to www.annualcreditreport.com/gettingReports.action, click on “request form” under the mail heading, then print out and complete the annual credit report request form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281

Fifteen States and the District of Columbia Limit Medical Debt Reporting

There has been strong activity by states to adopt medical debt credit reporting bans. State statutes that ban or restrict medical debt in credit reports contain several different types of prohibitions, which regulate different sets of actors. These include:

1. Prohibitions on CRAs including medical debts on credit reports;
2. Prohibitions on providers and debt collectors (called “furnishers”) reporting or furnishing medical debt to CRAs;
3. Prohibitions on creditors using medical debts on credit reports in their credit decisions.
4. Requirements that healthcare providers include in their contracts with debt collectors a provision that prohibits the debt collectors from furnishing medical debts to a CRA.

All of the state and local medical debt reporting statutes are listed below.  This list draws upon a July 11, 2025, Consumer Federation of America blog, Does Your State Allow Medical Bills to Appear on Credit Reports?, by Brad Lipton, Ethan Weiland & Rockaya Ndoye, which also breaks down each state statute using the categories above.  See also NCLC’s Fair Credit Reporting § 6.4.5.1.4.

California: Senate Bill 1061 (Cal. Civ. Code §§ 1785.13(a)(7), 1785.20.6, 1785.27, 1786.18(a)(9), 1371.56(C)(1)(A) (West)) enacted September 24, 2024, and effective January 1, 2025 (some provisions effective July 1, 2025), limits the furnishing of medical debt information to CRAs, CRAs reporting medical debt information, or anyone using medical debt information in credit evaluations; requires that healthcare providers use contract provisions prohibiting their debt collectors from furnishing medical debts to a CRA. 

Colorado: House Bill 23-1126 (Colo. Rev. Stat. § 5-18-109) enacted June 5, 2023, and effective August 7, 2023 and sunsets July 2, 2028, limits CRAs reporting medical debt information. 

Connecticut: Public Act 24-6 (Conn. Gen. Stat., §§ 19a-673b, 20-7i, 24–6 § 1(b)) enacted May 9, 2024, and effective July 1, 2024, limits furnishers from reporting medical debt information and requires that healthcare providers use contract provisions prohibiting their debt collectors from furnishing medical debts to a CRA.

Delaware: Senate Substitute 1 for Senate Bill 156 (opens in new page), enacted July 29, 2025, and effective October 27, 2025, prohibits the furnishing of medical debt information to CRAs and prohibits CRAs from reporting medical debt information.

District of Columbia: B26-0438 (D.C. Code § 28-3814(dd)(6)(A)), enacted August 20, 2026, and effective August 20, 2026, prohibits the furnishing of medical debt information to CRAs.

Illinois: Public Act 103-0648 (815 Ill. Comp. Stat. 505/2EEEE), enacted July 2, 2024, and effective January 1, 2025, limits CRAs reporting medical debt information.

Maine: Me. Rev. Stat. tit. 10, §§ 1308, 1310-H enacted June 9, 2025, and effective September 24, 2025, limits the furnishing of medical debt information to CRAs, and CRAs reporting medical debt information. 

Maryland: House Bill 1020 (Md. Code Ann., Com. Law § 14-1213; Md. Code Ann., Health-Gen. §§ 19-214.2(f), 24-2501, 24-2502) enacted April 22, 2025 and effective October 1, 2025, limits the furnishing of medical debt information to CRAs and CRAs reporting medical debt information, or anyone using medical debt information; requires that healthcare providers use contract provisions prohibiting their debt collectors from furnishing medical debts to a CRA. 

Minnesota: Ch. 114-S.F 4097 (2024) (Minn. Stat. § 332C.03), enacted May 21, 2024, and effective October 1, 2024, contains a limit on the furnishing of medical debt information to CRAs and CRAs reporting medical debt information.

New Jersey: Senate Bill 2806 (N.J. Stat. Ann. § 56:11-57, 56:11-58, 56:11-59(4)(d) and 56:11-62 (West)) enacted July 22, 2024, and effective July 22, 2024, limits the furnishing of medical debt information to CRAs and CRAs reporting medical debt information under $500; requires that healthcare providers use contract provisions prohibiting their debt collectors from furnishing medical debts to a CRA.

New York: Senate Bill 4097A (N.Y. Gen. Bus. Law § 380-j(f)(1) (McKinney); N.Y. Pub. Health Law, art. 49-A (McKinney)) enacted December 13, 2023, and effective December 13, 2023, limits the furnishing of medical debt information to CRAs and CRAs reporting medical debt information; requires that healthcare providers use contract provisions prohibiting their debt collectors from furnishing medical debts to a CRA.  

Oregon: Senate Bill 605 (Or. Rev. Stat. § 646A.677(11), (12)) enacted on September 15, 2025, and effective January 1, 2026, limits both the furnishing of medical debt information to CRAs and CRAs reporting medical debt information.

Rhode Island: Senate Bill 2709 (6 R.I. Gen. Laws §§ 6-60-1 to 6-60-5) enacted June 24, 2024 and effective July 1, 2025, limits the furnishing of medical debt information to CRAs and CRAs, reporting medical debt information; requires that healthcare providers use contract provisions prohibiting their debt collectors from furnishing medical debts to a CRA.

Vermont: S.27 (Vt. Stat. Ann. tit. 9, § 2466d and Vt. Stat. Ann. tit. 18, § 9485(b)), enacted on May 16, 2025, and effective July 1, 2025, limits the furnishing of medical debt information to CRAs and CRAs reporting medical debt information.

Virginia: House Bill 1370 (Va. Code Ann. § 59.1-444.4) enacted April 17, 2024, and effective April 17, 2024, limits the furnishing of medical debt information to CRAs. 

Washington: Senate Bill 5480 (Wash. Rev. Code §§ 19.16.100, 19.16.250(28)(a)(iii), 19.182.040(1)(g), 70.41.400(2); ch. 70.54) enacted on April 22, 2025, effective July 27, 2025, limits both the furnishing of medical debt information to CRAs and CRAs reporting medical debt information.

The CFPB’s Vacated Medical Debt Rule

In 2025, the CFPB issued a rule prohibiting CRAs from including medical debt information in consumer reports when those reports are provided to creditors for the purpose of making credit determinations.  See Prohibition on Creditors and Consumer Reporting Agencies Concerning Medical Information (Regulation V), 90 Fed. Reg. 3276 (Jan. 14, 2025), corrected at 90 Fed. Reg. 8173 (Jan. 27, 2025).  It also forbade creditors from considering medical debt information when making credit decisions. 

The trade group for the credit bureaus, Consumer Data Industry Association (CDIA), immediately challenged the rule in Texas federal court. Under the Trump Administration, the CFPB and CDIA filed a Joint Motion for Consent Judgment in which the parties requested that the court, pursuant to their agreement, enter a final judgment vacating the Medical Debt Rule. 

After allowing other parties, represented by NCLC, to intervene in the case, the court found that the rule exceeded the CFPB’s statutory authority. The court granted the motion to vacate the rule in its entirety.  See Cornerstone Credit Union League v. Consumer Fin. Prot. Bureau, 2025 WL 1920148 (E.D. Tex. July 11, 2025). The impact of the court’s decision is to vacate the rule nationwide and prohibit the CFPB from enacting a similar rule in the future.

Does the FCRA Preempt State Medical Debt Reporting Laws?

Given the increasing number of states prohibiting medical debt on credit reports, one critical issue is whether the FCRA preempts such statutes.  The FCRA has a complicated preemption scheme, providing for at least three different standards. Different sections and even subsections of the FCRA are subject to varying standards of preemption. See NCLC’s What the CFPB’s Recent FCRA Preemption Guidance Gets Wrong (Nov. 7, 2025); NCLC’s Fair Credit Reporting § 11.7.

The leading authority on this issue is the First Circuit’s decision in Consumer Data Indus. Ass’n v. Frey, 26 F.4th 1 (1st Cir. 2022), which held that the FCRA does not preempt Maine’s law restricting the reporting of medical debt, narrowly construing the scope of FCRA preemption with respect to the contents of consumer reports.  In June 2025, the Maine law was amended, changing the requirement for a 180-day waiting period before reporting medical debt to a complete ban on reporting. As a result, the preemption issue is back before the federal district court in Maine.  Other federal circuit court decisions on FCRA preemption include Aargon Agency Inc. v. O’Laughlin, 70 F.4th 1224 (9th Cir. 2023) and Galper v. JP Morgan Chase Bank, 802 F.3d 437 (2d Cir. 2015), which similarly held FCRA preemption was narrow with respect to state laws governing furnishers. 

In contrast, two federal district courts in Texas opined that the FCRA preempts state laws restricting the reporting of medical debt.  The court in CDIA v Paxton, 2026 WL 2322668 (W.D. Tex. Aug. 10, 2026) held that the FCRA preempts a Texas law prohibiting the reporting of debts from surprise medical bills (i.e., amounts remaining after insurance payments from out-of-network providers). In an unusual twist, the court rejected CDIA’s argument that the FCRA preempts all state laws regulating the contents of a consumer report, but held that the federal Act does preempt state laws regulating any adverse information in consumer reports. In addition, the court in the Cornerstone v. CFPB decision (discussed above) included a statement that “any state law purporting to prohibit a CRA from furnishing a credit report with coded medical information would be inconsistent with FCRA and therefore preempted.”  2025 WL 1920148, at *12. However, this statement was dicta, as the issue of preemption was not before the court. 

There appears to be only one other lawsuit claiming that the FCRA preempts a state medical debt credit reporting ban.  This lawsuit was filed by the debt collection industry in Colorado. Lindsey Toomer, Colorado Newsline, Colorado Ban on Medical Debt on Credit Reports Challenged After New Trump Administration Rule, Nov. 17, 2025.

Under the Trump Administration, the CFPB has weighed in by issuing an interpretive rule stating that the FCRA preempts all state laws that regulate the contents of consumer reports as well as state laws that regulate the furnishing of information to CRAs.  See Fair Credit Reporting Act; Preemption of State Laws, 90 Fed. Reg. 48,710 (Oct. 28, 2025).  This 2025 interpretive rule was the polar opposite of the CFPB’s 2022 interpretive rule, which the Trump-era CFPB withdrew, stating that the  “FCRA’s express preemption provisions have a narrow and targeted scope.”  The Fair Credit Reporting Act’s Limited Preemption of State Laws, 87 Fed. Reg. 41,042 (July 11, 2022).  By its own admission, the 2025 interpretive rule states it is not legally binding and the question is fundamentally one for the courts to decide.  90 Fed. Reg. at 48,711.  For more arguments that this 2025 interpretive rule was incorrect, see NCLC’s What the CFPB’s Recent FCRA Preemption Guidance Gets Wrong (Nov. 7, 2025).

While the case law and CFPB opinions have been mixed on the preemption issue, data from the Urban Institute indicates that the state laws have been effective on a practical level, in that there is little or no medical debt in many of the states with laws restricting the reporting of such debt on credit reports. Urban Inst., Debt in America: An Interactive Map.  

Finally, NCLC has issued guidance on including additional statutory provisions that have a minimal risk of FCRA preemption, such as requiring health care providers to include provisions in their contracts with debt collectors prohibiting the collectors from reporting their debts to CRAs.  See NCLC’s Prevent Medical Debt from Ruining Credit Reports: Recommendations in the Face of Potential Federal Preemption Threat (May 2025).

Acknowledgments

Thanks for contributions to this article by Brad Lipton of the Roosevelt Institute, and NCLC senior attorneys, April Kuehnhoff, Ariel Nelson, Jennifer Wagner.