A lot of people still believe medical debt was permanently removed from credit reports. In Texas, that is not where things ended up.
The federal rule that would have stripped medical debt from consumer reports was issued in January 2025, then vacated by a federal court in Texas that July. In August 2026, a federal court in the Western District of Texas, the same federal district that covers El Paso, went a step further and held that federal law overrides the one narrow Texas rule that kept certain surprise medical bills off reports. The practical result is loud: medical debt can still show up on a report pulled in El Paso today.
That confusion is shaping a lot of bad assumptions before mortgage and auto applications.
What actually happened with the medical debt rule?
The short version is that the rule was finalized and then reversed in court.
The Consumer Financial Protection Bureau issued a final rule on January 7, 2025 that would have barred credit bureaus from including medical debt information on credit reports and barred lenders from considering it. On July 11, 2025, the U.S. District Court for the Eastern District of Texas vacated the rule, and it is not in effect.
Then the CFPB changed its position on state laws. In an interpretive rule that applies from October 28, 2025, the bureau said the federal Fair Credit Reporting Act generally preempts state laws that touch broad areas of credit reporting, which includes state limits on medical debt. That rule replaced the bureau's 2022 interpretation, which had been withdrawn in May 2025.
Didn't Texas have its own medical debt rule?
It had a narrow one, and a federal court has now held it preempted. Texas Business and Commerce Code section 20.05(a)(5) barred credit bureaus from reporting certain medical collections from surprise out-of-network bills, and a federal judge in the Western District of Texas ruled on August 10, 2026, in CDIA v. Paxton, that the federal Fair Credit Reporting Act preempts it.
The Texas rule was never a broad medical debt ban. It covered a collection account with a medical industry code when the person had health coverage at the time of the care, and the collection was for the balance left after copays, deductibles, and coinsurance, owed to an emergency care provider or a facility-based provider for an out-of-network claim. Even before the ruling, the statute let a report include that information for a credit transaction of $150,000 or more.
The section is still printed in the Texas code, but the court has declared it preempted. As of October 2026, we found no report of an appeal.
Broader proposals did not get far. In the 2025 legislative session, House Bill 2478, a bill on reporting medically necessary debt, was referred to committee and never moved, and two similar bills, Senate Bill 1000 and House Bill 880, also died in committee. Some websites still say it became law. It did not.
Does that mean medical collections are normal again?
For Texas residents, mostly yes, within limits the three credit bureaus set for themselves. Under a voluntary policy Equifax, Experian, and TransUnion announced together, these medical collections are kept off reports:
- medical collections with an initial reported balance under $500
- paid medical collections, which have not been reported since July 1, 2022
- unpaid medical collections, until one year has passed
That policy is voluntary, not law. As of October 2026, we found no announced change to it. A medical collection that is unpaid, over a year old, and $500 or more can still appear on your report.
As of September 2026, the National Consumer Law Center counts 15 states plus the District of Columbia with laws restricting medical debt on credit reports. Texas is not on that list. So a medical collection that another state's law may keep off a report can still appear on a report pulled here.
That is not a reason to panic. It is a reason to know what is actually on the file before any application happens.
Why does this matter before a mortgage or auto pull?
Because medical collections often show up at the worst possible moment.
A consumer who assumed the federal rule was still active may not check the report at all before applying. Then the lender pulls the file, and a medical collection appears that should have been looked at months earlier. Now the application is on the clock and the options are smaller.
Knowing the report ahead of the application is the difference between a calm fix and a rushed one.
What kind of medical items still respond to disputes?
Medical bills often pass from a provider through an insurer before a collector ever sees them, and each handoff is a chance for a mistake.
Common issues that often justify a dispute include:
- collections that were already paid by insurance
- paid medical collections that still appear, since the bureaus' own policy is to remove them
- medical collections with an initial reported balance under $500, which the bureaus say they no longer report
- balances that do not match the original provider invoice
- items reported under the wrong patient or date of service
- duplicate collections from multiple agencies on the same balance
- items the collector cannot verify when challenged
The Fair Credit Reporting Act still applies to all of these. The federal rule being vacated did not change a consumer's right to dispute inaccurate information. Accurate medical collections are a different story: they stay until they age off, like any other accurate item.
What is the calmer way to handle medical debt on a report?
Start with the report, not the bill.
A useful first step is to see exactly what is on the file across all three bureaus, identify which medical items are actually accurate, and decide which ones are worth a dispute or a different approach. Some are worth a written dispute with the bureaus. Others are better handled with the original provider or insurer first, such as a bill insurance should have paid. The right move depends on what is actually on the report.
That is the step that gets skipped when someone assumes the federal rule cleaned things up on its own.
If you are already working with Daisy, hold off on all new credit until your repair is finished, and call her at (915) 603-0785 before you apply for anything or respond to a medical collector, so it can be checked against your reports first. If you are new here and want to see what is actually on your report and what the realistic options are, book your free credit strategy review.