Golden State Today

California Attorney General Rob Bonta has issued a consumer alert regarding new protections against medical debt appearing on credit reports. The legislation, Senate Bill 1061 (SB 1061), authored by Senator Monique Limón and sponsored by Attorney General Bonta, became effective on January 1, 2025. This law prohibits most forms of medical debt from being included in credit reports, aiming to prevent financial harm to consumers.

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."

Senator Monique Limón expressed her support for the legislation, noting its broader implications: "I am proud to author legislation to provide relief to Californians suffering from the burden of medical debt. 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."

The Consumer Financial Protection Bureau (CFPB) has also taken steps at the federal level by finalizing a rule banning medical bills from credit reports. In August 2024, Attorney General Bonta supported this rule through a letter sent to CFPB.

Medical debt poses significant challenges nationally by affecting employment opportunities and housing access. Individuals with such debts face higher risks of being denied rentals or mortgages compared to those with student loans or credit card debts.

To ensure compliance with these protections, consumers are encouraged to regularly monitor their credit reports for any inaccuracies or changes. They are entitled to one free report annually from each of the three major national bureaus: Equifax, Experian, and TransUnion.

In case consumers find unauthorized medical debt on their reports despite these protections, they should contact relevant parties including the medical provider's office and credit agency for rectification. If issues persist after notifying these entities, seeking legal advice or filing a complaint may be necessary.

Consumers can obtain more information about ordering and correcting their credit reports online or via mail through specified channels provided in official communications.