Key Takeaways
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The three major credit bureaus made changes in 2022 and 2023 to how medical debt collection affects credit reports.
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Medical bills over $500 that go to collections can still appear in your credit report.
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You can protect your credit score by paying bills promptly, monitoring your credit report, and taking action if issues emerge.
Some Americans fall behind on medical debts, especially if they have complex health concerns or see many doctors. What happens when you fall behind on medical debt? If medical bills go to a debt collector, they can start to impact credit scores. Fortunately, changes to medical collection debt reporting could eliminate medical debt collection from many credit reports.
Does medical debt affect your credit?
In July 2022, the three major credit bureaus joined efforts to remove reporting of paid off medical debts. In April 2023, they also removed medical debts valued under $500, according to the Consumer Financial Protection Bureau (CFPB).
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, medical collection debt doesn’t remain on your credit report after it's paid.
Medical providers don’t usually report account information to a credit bureau unless it’s past due. And even then your account may go to a collection agency. Now that these smaller bills don’t make it in a consumer credit report, it can alleviate the credit burden for many consumers.
Paying medical debt with your credit card could have an impact
Some consumers may choose to use their credit card to pay a medical bill (instead of a check or debit card payment from a bank account). A credit card may help you cover health care in case of an unexpected medical bill, but it comes with a few risks.
Are you confident you can pay off the balance before it begins accruing interest? If not, you could end up paying costly interest on the debt.
Depending on the size of your medical debt, adding this to a credit card can skew your credit utilization ratio (the percentage of available credit you’re using). How much credit you’re using may influence your credit score.
If you miss or make a late payment on your credit card, this may also affect your credit report and credit score.
Did you know?
If you're having problems with credit card debt or you're past due on payments, a financial hardship assistance program might help. You could meet your financial obligations and preserve your credit. Discover® Cardmembers facing a hard financial times can visit our resource center for credit card delinquency.
How long does medical debt stay on your credit report?
Before the 2022 changes, unpaid medical bills that went to collections could remain on your credit report for up to seven years. The newest changes to credit reporting have eased that standard. Now, after you pay your medical debt, it should be 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?
Ask your medical provider for an itemized bill
Review the services you’ve received. Ask your provider for clarification if any charges look incorrect or confusing. If you have health insurance, make sure your provider has requested payment from your insurer.
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 you can make installment payments. Before deciding on a payment plan, consider your budget carefully. Include your income, bills, and anticipated future expenses. Then, make sure you have the terms of your payment plan in writing.
Pay the medical bill by its due date
Always pay bills on time, 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. Save documentation of each payment in case you need 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 discounted medical care to people who qualify. Even if your bill is from a for-profit hospital or facility, they might have financial assistance programs or work with organizations that can help. 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 could 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. Paid medical debt should not appear on your credit report, so the faster you can pay your debt, the sooner you could repair your credit.
Reduce your medical debt to less than $500
Your credit report shouldn’t show any medical debts smaller than $500. Totally paying off your debt may help you avoid future financial difficulties. But if you could pay medical debt off below $500 you could still bring relief.
Dispute medical bills that appear inaccurate
You could access a free copy of your credit report every week. Look out for inaccuracies, like charges that your health insurance should cover or that you’ve already paid off. You can reach out to the healthcare provider or the debt collection agency to resolve it. This might mean you’ll need to provide 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
You may qualify for debt forgiveness from your provider 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. Some of these programs will depend on your income level.
You have options to keep an unpaid medical bill from lowering your credit score. It’s important to monitor your credit report and medical bills to identify and address any problems quickly. Seek financial assistance, dispute erroneous charges, and take advantage of payment plans.
