Does Your State Allow Medical Bills to Appear on Credit Reports

Credit reports serve as economic gatekeepersfor millions of Americans seeking to buy a home or a car, start a business, find an apartment, or apply for a job. Medical bills appear on the credit reports of about 15 million people. The reporting of these bills causes a lot of pain, for no good reason: rigorous research - including a recent studyfrom the National Bureau of Economic Research - indicates that medical debt on credit reports does not meaningfully predict whether people will pay other bills. In other words, the best available evidence indicates that medical bills on credit reports are probably just noise.

Research from the Consumer Financial Protection Bureau also showsthat Americans across the income distribution incur medical debt. Yet lower-income individuals, people of color, veterans, young adults, and older Americans are more likely to have it.

Since 2023, fourteen states have taken the common-sense step of removing many medical bills from the credit reports of their residents. Delaware will soon become the fifteenth, as a law just passed the state legislature there with unanimous, bipartisan support and awaits the signature of the governor, who has been a championfor this important measure.

State laws prohibiting the credit reporting of medical bills have taken different forms:

1. Many prohibit consumer reporting agencies from reportingmedical bills;
2. Others bar certain health care providers and debt collectors from furnishingmedical bills to consumer reporting agencies; and
3. Others prohibit the use ofmedical information that appears on consumer reports.

To assist advocates and legislators in states that are considering removing medical bills from their residents' credit reports, as well as researchers who are monitoring these changes, we have compiled information about the laws in these fifteen states into an interactive map. Hover over each state for more information about each law, including what it prohibits, the passage and effective date, and a link to the law itself.

Removing medical bills from credit reports will help millions of Americans when they look for housing or employment and will improve the usefulness of the credit reporting system. It's great news that so many states are taking this important step to help their residents and the local economy.

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