Medical Debt on Your Credit Report: Federal and State Rules

Apart from a narrow rule for veterans' medical debt, no federal law keeps medical debt off your credit report today. The Consumer Financial Protection Bureau's January 2025 rule that would have done so was vacated by a federal court in Texas on July 11, 2025 (CFPB). What applies instead is a mix of the three national credit bureaus' own policies, federal limits on when nonprofit hospitals may report you, and state laws that ban medical debt reporting in some states.

Those state laws are now in a preemption fight. On August 10, 2026, a federal court in Austin held that the federal Fair Credit Reporting Act preempts a Texas ban on reporting certain medical debt (order). This guide explains each layer, what changed, and how to challenge a medical debt entry.

Information last verified on October 20, 2026. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This guide covers federal rules and court decisions on medical debt in consumer credit reports, the IRS section 501(r) collection rules for nonprofit hospitals (26 CFR 1.501(r)-6), the national credit bureaus' published policies, and state medical-debt credit reporting laws in the 50 states and the District of Columbia. It does not cover how credit scoring models weigh medical debt, the tax treatment of forgiven debt, or deadlines for suing on a debt (see the statute of limitations on debt).

Medical debt credit report check

Your state’s rule on reporting medical debt, next to the federal position.

State where you got the careChoose oneAlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareDistrict of ColumbiaFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyoming

Federal position: the 2025 federal rule was vacated on July 11, 2025, so no general federal ban is in force (federal law does limit reporting of some veterans’ medical debt). The three national credit bureaus say they leave off paid medical collections and those under $500, and wait a year before reporting unpaid ones. The CFPB said in October 2025 that it reads federal law as generally preempting state credit reporting laws; courts decide that question, and in August 2026 a federal court in Texas held a Texas medical debt reporting law preempted.

Source: Cornerstone Credit Union League v. CFPB, No. 4:25-cv-00016 (E.D. Tex.); Equifax, Experian and TransUnion joint announcement; CFPB interpretive rule, 90 FR 48710 (Oct. 28, 2025); Consumer Data Industry Ass'n v. State of Texas, No. 1:19-cv-876-RP (W.D. Tex. Aug. 10, 2026)

Open the full medical bill checker

Can medical debt still go on your credit report?

It can, subject to three layers of limits:

1. The credit bureaus' policies. Equifax, Experian and TransUnion have said they will not include some kinds of medical collections. These policies apply nationwide but are voluntary.
2. Federal rules for nonprofit hospitals. A nonprofit hospital must wait, give notice and pause for a financial assistance application before reporting you.
3. State law. Some states bar hospitals, collectors, credit bureaus, or all three from reporting medical debt.

One narrow federal rule covers veterans. The Fair Credit Reporting Act bars the national credit bureaus from reporting a veteran's medical debt until one year after the care was given, and from reporting it once it is fully paid or settled, when the bureau knows the debt is a veteran's medical debt (15 U.S.C. 1681c(a)(7)-(8)). A veteran's medical debt is a medical collection debt owed to a non-VA provider for care the VA authorized and that was sent to the VA for payment, and it also includes medical debt the VA wrongly charged a veteran (15 U.S.C. 1681a). If a debt on your report is one of these, say so in your dispute.

Outside veterans' medical debt, there is no general federal ban. The CFPB's 2025 rule is gone, and the open question now is how far federal law allows the third layer to reach.

What the three credit bureaus say they do

In a joint announcement dated April 11, 2023, Equifax, Experian and TransUnion described three changes to how they handle medical collections (joint release):

Experian still states the under-$500 policy on a page dated October 9, 2025: "Unpaid medical collection accounts under $500 don't show up on your credit report and don't impact your credit score" (Experian).

These are the companies' policies, and no federal law requires them. Two practical points follow. A medical debt of $500 or more that has been unpaid for a year can still appear. And because the companies wrote the policies, they could change them; check the bureau's current statement before relying on one in a dispute. New Jersey is an exception on the state side: its law bars credit bureaus from reporting paid medical debt or medical debt under $500.

The CFPB medical debt rule was vacated

In January 2025 the CFPB issued a rule under Regulation V, the Fair Credit Reporting Act rules, titled Prohibition on Creditors and Consumer Reporting Agencies Concerning Medical Information. On July 11, 2025, the U.S. District Court for the Eastern District of Texas vacated it "upon the joint request of the Bureau and the plaintiffs in Cornerstone Credit Union League v. CFPB" (CFPB).

If you read that medical debt was "banned" from credit reports, that report was about this rule. It is not law today.

Nonprofit hospitals: credit reporting is an extraordinary collection action

Federal tax rules for nonprofit (501(c)(3)) hospitals list "reporting adverse information about the individual to consumer credit reporting agencies or credit bureaus" as an extraordinary collection action (26 CFR 1.501(r)-6). That brings it under the same limits as lawsuits, liens and wage garnishment:

• 120-day wait. The hospital refrains from extraordinary collection actions for at least 120 days from the date it provides the first post-discharge billing statement.
• 30-day notice. Before the first such action, the hospital gives written notice that financial assistance is available, names the action it may take, and sets a deadline no earlier than 30 days after the notice.
• Pause for an application. If you submit a financial assistance application, complete or incomplete, during the application period, the hospital may not start or continue those actions until it decides whether you are eligible, as long as you answer its requests for missing information in reasonable time.
• The application period runs from the date of care to the later of the 240th day after the first post-discharge billing statement or the deadline in the 30-day notice (26 CFR 1.501(r)-1).

So if a nonprofit hospital bill is heading toward collections, a financial assistance application is also a way to stop credit reporting while the hospital decides. Our guide to hospital charity care covers how to apply and the state income levels for free or discounted care. These federal rules do not apply to for-profit hospitals.

State laws that keep medical debt off credit reports

State laws in this area take different forms. Some bar hospitals and other providers from furnishing medical debt to a credit bureau; some bar the credit bureaus from including it; some do both. In California, Connecticut, New Jersey, New York and Washington, among others, a medical debt reported in violation is void.

These are examples of state reporting bans, with the scope each law gives:

Other states set timing or narrow rules instead of a ban:

Colorado's ban has an end date written into it: starting July 1, 2028, the ban on medical debt in credit reports and the related collector rules are repealed unless the legislature extends them (C.R.S. 5-18-109(1)(f)(II)).

The medical bill checker shows the rule for every state, including states with no medical-debt reporting law, for example Colorado, New York and Texas.

Federal preemption: why state bans are being challenged

The federal Fair Credit Reporting Act limits what states can do about credit reports. The provision at the center of these cases, 15 U.S.C. 1681t(b)(1)(E), says no requirement or prohibition may be imposed under state law "with respect to any subject matter regulated under" section 1681c, "relating to information contained in consumer reports" (as quoted in the Texas order).

The CFPB's 2025 interpretive rule

On October 28, 2025, the CFPB issued an interpretive rule (90 FR 48710) stating that the Fair Credit Reporting Act "generally preempts State laws that touch on broad areas of credit reporting" (Federal Register). It replaced a July 2022 interpretive rule, withdrawn in May 2025, that had named medical debt as an area states could regulate. The rule also says that parties interested in how preemption applies to particular state laws "can litigate such questions in court." It is the CFPB's reading of the statute; courts decide whether a given state law is preempted.

Consumer Data Industry Association v. Texas (August 10, 2026)

In 2019, Texas enacted Tex. Bus. & Com. Code 20.05(a)(5), which barred a consumer reporting agency from furnishing a report containing a collection account with a medical industry code if the consumer had a health plan at the time and the collection was for an out-of-network balance owed to an emergency care provider or a facility-based provider, after copayments, deductibles and coinsurance. The credit bureaus' trade association sued.

On August 10, 2026, Judge Robert Pitman of the U.S. District Court for the Western District of Texas granted the association's motion for summary judgment in part. The court declared that section 20.05(a)(5) "is expressly PREEMPTED by 15 U.S.C. § 1681t(b)(1)(E)" and permanently enjoined the State of Texas, through its Attorney General, from enforcing it (order, No. 1:19-cv-876-RP). The court said it would enter final judgment by separate order.

The court said it disagreed with part of the reasoning of the First Circuit in Consumer Data Industry Ass'n v. Frey, 26 F.4th 1 (1st Cir. 2022), a challenge to Maine's medical-debt law. The Texas court also declined to hold that the federal provision preempts every state law relating to information in consumer reports. Its reasoning, though, was that Congress meant to bar states from passing laws more protective of consumers about adverse information in credit reports, which it said includes medical debt, so other states' bans could face the same argument. The court also noted that nothing in the federal law prevents the credit bureaus from choosing not to report certain adverse information.

What this means for you

• The Texas order names only the Texas provision. Other states' bans are separate laws, and as the CFPB rule itself says, preemption of a particular state law is decided in court.
• Colorado's ban is being challenged by a debt collectors' trade group in a federal case filed in November 2025.
• The bureaus' voluntary policies and the nonprofit hospital rules are not affected by either development.
• If your state has a ban, it is still worth naming it in a dispute. Pair it with the bureau policy that applies, so your dispute does not rest on one argument.

Before you dispute the entry: is the debt itself right?

A medical debt can be on your report and still be for an amount you never owed. Check these first:

• A surprise bill. If you have a group health plan or individual health insurance, then for out-of-network emergency care, a nonemergency service from an out-of-network clinician at an in-network hospital, or an air ambulance, the No Surprises Act limits what you owe to your in-network cost sharing, unless you signed a valid written waiver where the law allows one (see 45 CFR 149.410 for emergency care). See the No Surprises Act guide.
• A bill well over your good faith estimate. If you were uninsured or self-pay (not enrolled in Medicare, Medicaid or another federal program) and the bill is at least $400 over a provider's estimate, a dispute is possible if you start it within 120 calendar days of the first bill. While it is pending, the provider must not move the bill to collection, and if the bill is already in collection the provider "should cease collection efforts" (45 CFR 149.620). See the good faith estimate guide.
• Medicaid. Medicaid providers must accept the Medicaid payment, plus any permitted cost sharing, as payment in full (42 CFR 447.15).
• Medicare Qualified Medicare Beneficiaries. Since 1997, federal law has barred Medicare providers from collecting Part A and Part B deductibles, coinsurance and copayments from QMBs, including those in Medicare Advantage (CMS).
• Collecting more than the law allows. Under the Fair Debt Collection Practices Act, which governs collection agencies and other debt collectors, collecting any amount not "expressly authorized by the agreement creating the debt or permitted by law" is an unfair practice (15 U.S.C. 1692f(1)).

Our guide on how to dispute a medical bill covers getting the itemized bill and comparing it with your explanation of benefits.

How to dispute a medical debt on your credit report

1. Get your report from each bureau and find the medical entry. Note the date it was reported, the balance, and who furnished it.
2. Compare it with the bureau policies. Is it paid? Was its initial balance under $500? Has it been unpaid for less than a year? Any of these is a reason the bureaus say it should not be there.
3. Check your state's law in the medical bill checker.
4. Gather proof. Your explanation of benefits, payment receipts, a financial assistance approval, the No Surprises Act notice or good faith estimate, and the state law citation if one applies.
5. Dispute in writing with the credit bureau and with the hospital or collector that reported the debt. Keep copies of what you send and the date you sent it.
6. Apply for financial assistance if the bill came from a nonprofit hospital and you are inside the application period. A pending application pauses credit reporting by that hospital.
7. Complain to the CFPB if the entry is not corrected. You can submit a complaint online at consumerfinance.gov or call (855) 411-CFPB (2372) (CMS toolkit).

If a collector is calling or suing, our debt collection laws guide explains your rights, and the guides on the statute of limitations on debt and how to stop wage garnishment cover the later stages.

Related guides

• Medical bills: your rights before you pay
• Hospital charity care
• How to dispute a medical bill
• No Surprises Act
• Debt collection laws
• Medical bill checker

This article provides general legal information about medical debt and credit reports under federal law and the laws of the states named, current as of October 20, 2026. It is not legal advice. For advice about a specific debt or credit report entry, contact a lawyer licensed in your state or your state's legal aid program.

Last updated: October 20, 2026.

Frequently Asked Questions

Is medical debt removed from credit reports in 2026?

Not by any general federal law. Federal law does keep a veteran's medical debt for VA-authorized care off reports for one year after the care and once it is paid or settled (15 U.S.C. 1681c(a)(7)-(8)). The CFPB rule was vacated on July 11, 2025. The three national credit bureaus say they do not include paid medical collections, medical collections with an initial balance under $500, or unpaid medical collections less than a year old, and some states ban medical debt reporting under their own laws.

Did the CFPB ban medical debt from credit reports?

The CFPB issued a rule in January 2025, but the U.S. District Court for the Eastern District of Texas vacated it on July 11, 2025, on the joint request of the CFPB and the plaintiffs in Cornerstone Credit Union League v. CFPB. It is not in effect.

Does medical debt under $500 show up on my credit report?

Equifax, Experian and TransUnion say medical collections with an initial reported balance under $500 are not included. That is the bureaus' policy rather than federal law; New Jersey separately bars credit bureaus from reporting medical debt under $500.

Can a hospital report my unpaid bill to a credit bureau?

A nonprofit hospital may not do so for at least 120 days after its first post-discharge bill, must first give a written notice with a deadline at least 30 days out, and must pause while a financial assistance application filed in the application period is pending (26 CFR 1.501(r)-6). Some states, such as California, Minnesota and Virginia, bar providers from reporting medical debt at all.

Which states ban medical debt on credit reports?

Examples include California, Colorado, Illinois, Minnesota, New Jersey, New York, Virginia and the District of Columbia, each with its own scope. The medical bill checker shows the rule for every state.

Is the Texas medical debt credit reporting law still in effect?

On August 10, 2026, the U.S. District Court for the Western District of Texas declared Tex. Bus. & Com. Code 20.05(a)(5) preempted by the federal Fair Credit Reporting Act and permanently enjoined Texas from enforcing it, in Consumer Data Industry Association v. Texas.

Where do I complain about medical debt on my credit report?

You can submit a complaint to the Consumer Financial Protection Bureau online or by calling (855) 411-2372. Dispute the entry with the credit bureau and the company that reported it as well.