New Yorkers Medical Debt Will No Longer Affect Credit Reports

by Mindy Cohn

Under a bill signed into law on Wednesday, credit agencies will no longer be allowed to report or collect medical debt information so that such debts will no longer appear on credit reports for New Yorkers. 

New York hospitals, health care professionals, and ambulances are also banned from reporting on medical debt to credit agencies.

The new law went into effect immediately, positively affecting the more than 740,000 New Yorkers with unpaid medical debt owed to collection agencies on their credit reports as of February 2022, according to a study by the Urban Institute. 

The federal Consumer Financial Protection Bureau is considering a similar nationwide measure even though the law is only practiced in one other state besides New York. 

Consumers should be aware that the new law will not apply to medical debt that is charged to a credit card and that it doesn't apply to out-of-state health care providers either.