At least 15 states have laws banning or restricting medical debt from appearing on credit reports, including California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Virginia, and Washington State, though federal actions have created legal uncertainty, making state-level protection crucial for residents. These state laws, often passed with bipartisan support, aim to prevent medical bills from harming credit scores, impacting housing, jobs, and loans.
About 15 states, including California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Virginia, and Washington, have laws restricting or banning medical debt from credit reports, though federal legal challenges and conflicting CFPB rules create uncertainty about their enforcement, with some states recently passing stronger measures like limiting reporting thresholds or interest.
In June 2024, the CFPB finalized a rule to eliminate all medical debt from most credit reports and ban lenders from using medical debt collection information to make underwriting decisions.
Introduced in House (10/19/2023) This bill prohibits consumer reporting agencies from including medical debt on a consumer report (i.e., credit report).
About the debt relief program
Public Health partnered with the non-profit organization Undue Medical Debt to implement the program. Residents started to receive letters to say their debt was canceled in May 2025 and, as of December 2, 2025, over $363 million of medical debt has been erased for over 171,000 residents.
The rule removes a financial information exception for medical accounts and adds a restriction that forbids consumer reporting agencies from supplying medical account information to creditors when they determine a person's ability to take on new debt or expand existing obligations.
5 Useful Tips to Help You Erase Medical Debt
The 7-in-7 rule (or 7x7 rule) in debt collection, part of the CFPB's Regulation F , limits how often debt collectors can call a consumer about a specific debt: they cannot call more than seven times within seven consecutive days, nor can they call again within seven days of a conversation about that debt, preventing harassment and abusive practices, though these are rebuttable presumptions of compliance.
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.
Yes, you should worry about medical bills in collections because they can hurt your credit, but you have rights, and there are steps to take, including verifying the debt, negotiating, exploring financial assistance (like hospital charity care or government programs), and understanding recent changes where paid medical debt and bills under $500 are removed from credit reports. Ignoring them is risky, as they can still impact loans, housing, and even jobs.
A new California law kicked in earlier this year that keeps delinquent medical debt from appearing on a credit report. The federal government says this is not allowed. At risk are the credit scores of millions of Americans who are behind on medical bills.
Medical bills can be removed from your credit report in certain scenarios. Accurately reported medical collection accounts over $500 will be removed from your credit report once they're paid. If they remain unpaid, they will come off your credit report after seven years from the date the account became delinquent.
The Worst Kinds of Debt to Have
Debts resulting from fraud, theft, or embezzlement. Court-ordered fines, penalties, or restitution. Most tax debts (some older tax debts may be dischargeable). Debts that were not listed in your bankruptcy petition (unless the creditor learns of your bankruptcy case).
To write off debt you need to prove you are unable to pay what you owe. There are debt solutions that can do this for you. And, in some cases, the people you owe may agree to write off some, or all, of your debt. This may be through making a settlement offer.
Yes, medical debt can be forgiven or reduced, but it often requires specific programs, income qualifications (like being below 400% of the Federal Poverty Level), or state/local initiatives, with organizations like Dollar For helping patients apply for hospital charity care or debt relief, though it's not automatic for everyone and depends heavily on your location and financial situation.
Nationwide, the average credit score is 715. State by state, however, the numbers are all over the map. The average U.S. credit score is 715, according to FICO's Score Credit Insights, which examined data from April 2025.
Some patients may qualify for financial aid, hospital assistance programs, or retroactive Medicaid to reduce or eliminate medical debt. New rules limit how medical debt appears on credit reports, but larger unpaid balances can still hurt your score if left unresolved.
The "777 rule" in debt collection, also known as the 7-in-7 rule, is a CFPB regulation (Regulation F) limiting calls: collectors can't call more than 7 times in 7 days for a specific debt, nor call within 7 days of a conversation about that debt. It aims to prevent harassment, applying to calls, texts, and emails, though exceptions exist, and the presumption of compliance can be rebutted by aggressive call patterns like rapid succession or highly concentrated calls.
No, a hospital cannot turn you away from the emergency room for owing money due to federal law (EMTALA), requiring stabilization for emergencies regardless of ability to pay; however, for non-emergency care, hospitals can refuse treatment, require deposits, or stop services for unpaid bills, especially for private hospitals, though nonprofit hospitals must follow specific financial assistance policies before extreme collections, notes Massachusetts Legal Help and NCLC Digital Library.