California bans medical debt from credit reports

California Gov. Gavin Newsom has signed a bill that will prohibit medical debt from being included on consumers' credit reports. 

The law also bans using medical debt listed on a credit report as a negative factor when making credit decisions, according to a Sept. 24 news release from the governor's office. 

The legislation had been supported by several organizations, including the California Nurses Association and the National Consumer Law Center, according to a Sept. 24 news release from California Attorney General Rob Bonta, who also supported the bill. 

The release from the attorney general's office said that credit reports are meant to gauge a person's ability to repay future debt. 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." 

 

  

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