California credit and debt laws

California statute of limitations on debt

• Book accounts and accounts stated. Covers a book account with one or more entries, an account stated, and a mutual, open and current account. The clock runs from the date of the last item when there is more than one.

Time limits to sue vs. time on your credit report

The California deadlines above control how long a creditor or collector can win a lawsuit. They don't change how long an account stays on your credit report. The federal Fair Credit Reporting Act limits most negative items to 7 years in every state, counted from the date of first delinquency, and a payment doesn't restart that reporting clock. See how long negative items stay for both clocks side by side.

Can a payment restart the clock?

An acknowledgment or promise only extends the deadline if it is in writing and signed by you (Cal. Code Civ. Proc. 360). A payment of principal or interest on a promissory note counts as an acknowledgment, but the same section says a payment by itself does not revive a claim that is already barred. Once the Section 337 period has run, it can only be extended under Section 360 (Cal. Code Civ. Proc. 337(d)).

Does California limit lawsuits on old debt?

Yes. Once the Section 337 deadline has passed, no one may sue, start an arbitration or bring any other legal proceeding to collect the debt (Cal. Code Civ. Proc. 337(d)). A collector writing about a time-barred debt must also include a set notice saying it will not sue you, and saying whether it may still report the debt to the credit bureaus (Cal. Civ. Code 1788.14(d)).

Medical debt on credit reports in California

No one may furnish information about a medical debt to a credit bureau in California. A medical debt that someone knowingly reports in violation of the law becomes void and unenforceable. Since July 1, 2025, a written contract that creates a medical debt must state that the holder is barred from reporting it, and a contract missing that term is void. The law: Cal. Civ. Code 1785.27 (SB 1061, amended by AB 1521). In effect since January 1, 2025.

Compare every state in medical debt laws by state.

Marriage and debt

California is a community property state. Debts taken on during the marriage can be treated as shared under state law, but each spouse still has a separate credit report, and an account shows only on the reports of the people on it.

Can employers check your credit?

Employers may use a credit report only for listed positions, such as managerial jobs, law enforcement, jobs with regular access to $10,000 or more in cash, signers on the employer's accounts, and jobs with access to customers' bank or card numbers together with Social Security numbers and birth dates. The law: Cal. Lab. Code 1024.5.

Do debt collectors need a California license?

Yes. No person may engage in the business of debt collection in California without a license under the Debt Collection Licensing Act (Cal. Fin. Code 100001), which the Department of Financial Protection and Innovation administers.

In California, complaints about debt collectors and credit reporting can go to California Department of Financial Protection and Innovation, as well as to the Consumer Financial Protection Bureau.

More to know in California

California gives oral agreements only 2 years and written ones 4, which is short next to most states. What sets the state apart is what happens after the deadline. Under Code of Civil Procedure 337(d), a written-contract or book-account debt past its deadline can't be taken to court or to arbitration at all, and a letter about an old debt has to carry a required notice that the collector will not sue. If the debt is also past the federal credit reporting period, the notice must say the collector will not report it either. Hospital debt has its own rule: the collector's first letter must include a required notice, and it has to wait at least 180 days after you were first billed before it can sue (Cal. Civ. Code 1788.14(e)). Medical debt can't be furnished to credit bureaus at all, and reporting it knowingly voids the debt. California is also a community property state, one of nine the IRS lists. Employers outside the listed job types can't use your credit report in hiring.

Guides that go deeper

• The statute of limitations on debt, and how a payment can reset itA statute of limitations limits when a collector can sue, not whether it can ask you to pay. How the clock starts, how it can restart, and what Reg F bans.
• How zombie debt and illegal re-aging bring old debts backZombie debts are old, paid, or wrong debts that resurface after a sale. Re-aging is reporting a newer delinquency date. How to spot and fight both.
• Sued by a debt collector? What to do in the first 2 weeksA debt lawsuit you ignore usually ends in a default judgment. What to read on the summons, how to respond on time, and where to find free legal help.
• Which states ban medical debt on credit reports? The 2026 listFifteen states have laws keeping medical debt off credit reports. The statute, start date and reach of each, plus the bureau rules that apply everywhere.
• Medical debt on credit reports: the rules in force in 2026The federal medical debt ban was struck down in 2025. What still protects you in 2026: bureau policies, newer scores, state laws and hospital aid rules.