Your State Banned Medical Debt From Your Credit Report. A Texas Judge Just Said It Can't.

If your state passed a law keeping medical bills off your credit report, you were told that problem was handled. It isn’t handled. A federal judge in Texas just took one of those laws off the board, and the reasoning applies to every other one.

On August 10, 2026, in a case called CDIA v. Paxton, a federal court in Texas ruled that the Fair Credit Reporting Act preempts the state’s ban on reporting certain medical debts. The law is unenforceable. The Consumer Data Industry Association, the trade group for the credit bureaus that brought the suit, put out a statement calling it “a win for national uniformity” and said there “should be one national standard governing how information is provided to consumer reporting agencies and what can appear on a credit report.”

Read that again. The trade group’s position is that a state making your credit report more accurate about a hospital bill is a problem to be solved.

This didn’t come out of nowhere. The CFPB finalized a rule in January 2025 that would have stripped medical debt from the reports of about 15 million people carrying roughly $49 billion in bills. On July 11, 2025, a different federal court in Texas vacated it, writing that “any state law purporting to prohibit a credit reporting agency from furnishing a credit report with coded medical information would be inconsistent with FCRA and therefore preempted.” That October, the CFPB issued an interpretive rule agreeing that state medical debt laws are preempted.

So the federal protection died first, and the reasoning from that case is now the weapon aimed at the state protections behind it.

Here’s what they don’t tell you. The thing keeping most medical bills off most credit reports was never a statute. It’s the bureaus’ own voluntary policy, and no court touched it. Since July 2022, Equifax, Experian and TransUnion delete a medical collection once you pay it, no matter how long you took. Since July 2022, an unpaid medical collection stays off your report entirely for a full year. And since April 2023 they exclude any medical collection under $500, which erased close to 70 percent of medical collection tradelines.

So your real protection is a policy three private companies wrote for themselves and can rewrite whenever they like. Your legislature’s version is the one in court.

Do this now. Pull all three reports free at AnnualCreditReport.com and look for medical collections. Under $500 should not be there. Already paid should not be there. Either one is a written dispute with the bureau, and the bureau has 30 days.

If you have an unpaid bill over $500, the one-year delay is your window and it’s ticking from the day it hit collections. Call the provider’s billing office first, before the collector. Ask for the self-pay or charity care rate, ask for a payment plan, and get any settlement in writing before you send a dollar. A medical collection that never posts costs you nothing. One that posts and gets paid still cost you every loan you priced while it sat there.

Then find out what the score itself is worth. Run your number through our credit score tool, then price the same loan at two scores in the loan calculator. The gap between a 680 and a 720 on a five-year loan is real money, and it’s the whole reason the bureaus fought this hard to keep the tradeline.

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