New CFPB Rule May Affect Credit Scores in California

California is one of 15 states that ban medical debt from appearing on credit reports, protecting residents from credit score damage.
A new interpretive rule from the CFPB claims that federal law should override protections like California’s.
Because the rule isn’t legally binding, California’s ban remains in place for now but will likely face legal challenges.
If the courts strike down California’s protections, medical debt could return to credit reports and lower residents’ scores.
This comes as rising healthcare costs continue to put financial pressure on California households.