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HB 5500

AN ACT PROHIBITING CREDIT RATING AGENCIES FROM INCLUDING MEDICAL DEBT IN CREDIT REPORTS.

2025 Regular Session Introduced by Josh Elliott

Connecticut bill prohibits credit agencies from reporting medical debt, improving credit scores for residents facing health-related financial hardship but potentially altering lender risk assessments.

REF. TO JOINT COMM. ON Banking
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Bill Summary · HB 5500

Legislative bill overview

HB 5500 would prohibit credit rating agencies from including medical debt in credit reports for Connecticut residents. This is a data exclusion bill that treats medical debt differently from other consumer debts by removing it from the credit scoring calculation that lenders use to assess creditworthiness.

Why is this important

Medical debt affects millions of Americans and often arises from unexpected health events rather than financial mismanagement, yet it significantly damages credit scores and limits access to loans, housing, and employment. Removing medical debt from credit reports could improve borrowing access and financial stability for people who faced health emergencies, though it may also affect how lenders assess overall risk.

Potential points of contention

  • Lender concerns: Banks and credit card companies may argue that medical debt reflects actual inability to pay obligations and is relevant to creditworthiness, potentially raising interest rates or tightening lending standards if they lose this information
  • Definitional questions: The bill would need to clarify what qualifies as "medical debt" (hospital bills, prescriptions, insurance copays, elective procedures) and how to distinguish it from other debts
  • Limited scope: Connecticut-only legislation may be less effective since national credit reporting agencies operate across states and creditors' underwriting practices are nationally determined; federal action might be more impactful

Compiled from official sources — confirm details with the bill’s official record.

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