Attorney General Bonta Issues Medical Debt Consumer Alert

OAKLAND — California Attorney General Rob Bonta today issued a consumer alert informing Californians that it is now illegal for most forms of medical debt to appear on credit reports. 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. Medical debt is often unforeseen and not a reliable indicator of financial risk, yet it can unfairly prevent consumers from getting loans, renting an apartment, or getting a job.

“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,” said Attorney General Rob Bonta. “The best tool to ensure medical debt does not appear on your credit report is to check your credit report regularly; this can also help identify other errors and illegal activity, like identity theft. Consumers are entitled to one free credit report a year from each of the three national credit bureaus. As we ring in a new year and adopt resolutions, I urge Californians to keep up or start the important practice of monitoring their credit reports.”

“I am proud to author legislation to provide relief to Californians suffering from the burden of medical debt,” said Senator Monique Limón.“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.”

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.

At the federal level, the Consumer Financial Protection Bureau (CFPB) has finalized banning medical bills from consumers’ credit reports, and in August 2024, Attorney General Bonta sent a letter to CFPB in support of this rule.

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 our office by going to https://oag.ca.gov/report.