California Enacts Law to Remove Medical Debt from Credit Reports

Governor Newsom's new legislation aims to protect consumers from financial repercussions due to medical debt, effective January 1.

The law, signed by Governor Gavin Newsom, prevents medical debt from being reported to credit agencies, aiming to protect Californians' credit scores.
Authored by Sen. Monique Limón and supported by Attorney General Rob Bonta, the legislation addresses the financial impact of medical debt on housing, loans, and employment.
The law has a loophole: medical credit card debt is excluded, which can still affect credit scores, a concession won by the financial industry.
Medical debt disproportionately affects low-income, Black, and Latino Californians, with 4 in 10 residents carrying some form of medical debt.
California joins states like New York and Connecticut in enacting such protections, while similar federal measures are proposed but not yet implemented.