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Does Medical Debt Appear on Your Credit Report?

Published July 3, 2023
4 min read

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Key points about: medical debt on credit reports

  1. The three credit bureaus—TransUnion, Experian, and Equifax—have recently announced changes to how medical debt affects credit.

  2. Medical bills over $500 that go to collections can still appear on your credit report.

  3. You can prevent medical bills from harming your credit score by paying bills promptly, monitoring your credit report, and taking action if issues emerge.

After a medical emergency or a routine procedure, you’re probably accustomed to bracing yourself for the bill. It’s easy to fall behind on medical debts, especially if you have complex health concerns or see many doctors. Once medical bills go to the debt collector, they may start to impact  credit scores. Fortunately, some recent changes to medical collection debt reporting could eliminate medical collection debt from many credit reports. Read on to learn more about medical bills’ impact on credit scores.

Does medical debt affect your credit?

In July 2022, the Consumer Financial Protection Bureau (CFPB) reported that the three major credit bureaus, Experian, Equifax, and TransUnion, announced changes that could alter how medical debt affects your credit.

Medical providers typically don’t report payment information to credit bureaus. However, as your medical bills become overdue, a collection agency may take over your account. Previously, medical debt collections would start reporting on your credit after six months and continue to report, even after you’d paid your debt. The Congressional Research Service confirmed that, following the July 2022 reforms, medical bills don’t appear on your credit until after a full year in collections. Additionally, paid medical collection debt doesn’t remain on your credit report after it’s paid. Finally, beginning in 2023, unpaid medical collection debt below $500 no longer appears on credit reports.

According to the CFPB, because these smaller bills tend to remain on credit reports longer, this change alleviates the credit burden for many consumers. 

Did you know?

credit card can help you cover health care in case of an unexpected medical bill, but unless you’re confident you can pay off the balance before it begins accruing interest, it comes with risks. Paying for your medical bills with a credit card can influence your credit score. Depending on the size of your medical debt, bills can skew your credit utilization ratio (the percentage of available credit you’re using). While a $30 deductible may not do much to affect your credit, expensive procedures can have a significant impact. The more medical debt you accumulate on your credit card, the higher your credit utilization. Missed credit card payments also hurt your credit score.

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How long does medical debt stay on your credit report?

Until the recent changes were announced, unpaid medical bills that went to collections could remain on your credit report for up to seven years, according to the CFPB. However, the new changes to credit reporting have eased that standard. Now, after you pay your medical debt, it’s removed from your credit report. If you can’t pay off your debt in full, paying it down below $500 can also mitigate its impact on your credit. 

How do you prevent medical debt from affecting your credit?

You can take some measures to safeguard your credit from the effects of unpaid medical debt:

  • Ask your medical provider for an itemized bill and review the services you’ve received. Ask your provider for clarification if any charges look incorrect or confusing. You should also make sure your provider has requested payment from your health insurance when applicable, especially for bills that seem overly expensive. 
  • Discuss payment plans with your health care provider. If you can’t afford to pay off an entire medical bill upfront, ask your provider if it’s possible to pay in a series of installments. Consider your budget carefully, including your income, bills, and anticipated future expenses, before deciding on a payment plan. Then, make sure you have the terms of your payment plan in writing. 
  • Pay the medical bill by its due date, whether you cover the entire balance or agree to a payment plan. If you’re paying installments, incorporate the bill into your monthly budget and set aside funds from each paycheck as necessary. Save documentation of each payment in case you have to show proof in the future. 
  • Seek financial assistance. The CFPB reports that nonprofit hospitals in the United States offer financial assistance programs for uninsured and underinsured patients. These programs provide free or heavily discounted medical care to people who qualify. Even if you’re not at a nonprofit hospital, many other medical institutions have financial assistance programs or work with organizations that can help, so it’s always a good idea to ask. 

Can you get medical debt off your credit report?

If your unpaid medical debt is already impacting your credit, don’t panic. You can take a few steps to manage it and get it removed from your credit report:

  • Pay off your medical debt. The most straightforward way to remove your debt from your credit report is by paying off whatever you owe, if possible. Following the July changes, paid medical debt will no longer appear on your credit report, so the faster you can pay your debt, the sooner you can repair your credit.
  • Reduce your debt to less than $500. Beginning in 2023, your credit report should no longer reflect any medical debts smaller than that amount. While totally paying off your debt may help you avoid future financial difficulties, paying it off partially can still bring you relief.
  • Dispute medical bills that appear inaccurate. You can access a free copy of your consumer credit report from each primary credit reporting agency every twelve months. Pay careful attention to medical billing charges. Look out for inaccuracies, like charges that should have been covered by insurance or that you’ve already paid off. You can reach out to the medical provider or the debt collection agency to resolve it, which may require  providing proof of payment. Try to collect all the documents you have related to the incorrect charge in case you need to verify anything.
  • Apply for medical debt relief. Depending on your income level, you may qualify for debt forgiveness from certain hospitals or through local and state programs. Some nonprofits and religious organizations may also help you manage your medical debts before or after they affect your credit report.

The last thing anyone wants to deal with on top of an illness or medical issue is an unpaid medical bill affecting their credit score. Recent changes enacted by credit reporting companies mitigate that challenge. Nevertheless, it’s essential to monitor your credit report and your medical bills to identify and address any problems quickly. Actions like seeking financial assistance when necessary, disputing erroneous charges, and taking advantage of payment plans can help you manage your medical bills and credit score.

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