Key Highlights
Here are the key takeaways about medical debt and your credit:
- Unpaid medical bills only appear on your credit reports after they are sent to a collection agency and a 365-day grace period has passed.
- The three major credit bureaus no longer include paid medical debt collections on credit reports.
- Medical debt collections under $500 will not show up on your credit report or affect your credit score.
- An unpaid medical collection can significantly lower your credit score by as much as 100 points.
- A proposed federal rule to remove all medical debt from credit reports was recently blocked.
Introduction
Dealing with a medical issue is stressful enough without worrying about the bill. Even if you have health insurance, you can be left with surprisingly high costs. This often leads to a common question: can this medical debt hurt your credit score? Navigating the rules around medical bills and credit reports can be confusing, but recent changes have offered some relief to consumers. This guide will clarify how medical bills can impact your credit and what you can do about it.
How Medical Bills Interact with Your Credit
A medical bill from your doctor’s office won’t immediately affect your credit. Healthcare providers typically do not report payments to the major credit bureaus. The situation changes only if the bill goes unpaid for a significant period and is sent to a collection agency.
Once in the hands of debt collectors, a process begins that could lead to the debt appearing on your credit reports. However, medical debt is treated differently than other types of debt, with special timelines and rules in place. Let’s look at how unpaid bills make their way to your report and how credit agencies handle them.
Do unpaid medical bills show up on your credit report?
Yes, an unpaid medical bill can appear on your credit report, but not right away. Your healthcare provider must first send the overdue account to a collection agency. Even then, the debt won’t immediately damage your credit.
Credit bureaus provide a 365-day grace period before an unpaid medical debt in collections can be added to your credit report. This one-year window is designed to give you enough time to resolve the bill. You can use this period to negotiate payment, seek financial assistance, or sort out any issues with your insurance company.
If the bill remains unpaid after this amount of time, the collection agency can report it, and it will be listed on your credit report. An unpaid medical debt can stay on your report for up to seven years, potentially impacting your ability to get loans or credit in the future.
Are medical debts treated differently from other debts by credit agencies?
Credit agencies do treat medical debt differently than other consumer debts like credit card debt or personal loans. The major credit bureaus—Experian, Equifax, and TransUnion—have implemented specific rules that provide some protection for consumers with medical bills.
One of the biggest differences is that once you pay off a medical collection, it is completely removed from your credit report. This is not the case with most other types of collection accounts, which can remain on your report for seven years even after being paid.
Additionally, as of 2023, any medical debt in collections with an initial balance under $500 will not be included on your credit report at all. This helps prevent smaller bills from unfairly damaging your credit. This special handling acknowledges that this type of debt is often unexpected and difficult to manage.
Changes in Medical Debt Reporting and Credit Laws
In recent years, significant changes have reshaped how medical debt affects your credit. The major credit bureaus, in coordination with the Consumer Financial Protection Bureau (CFPB), have updated their reporting practices to lessen the burden on consumers.
These updates, along with legislation like the No Surprises Act, aim to provide more transparency and protection. It’s important to understand these new rules, as they directly impact what appears on your credit reports and how your score is calculated. The following sections will explain a key proposed rule and other recent updates you should know about.
Has there been a new rule removing medical bills from credit reports?
There was a significant effort to completely remove medical bills from credit reports. In June 2024, the Consumer Financial Protection Bureau (CFPB) proposed a new rule that aimed to stop consumer credit bureaus from including any medical debt in their credit reporting. The goal of the CFPB rule was to prevent medical issues from harming a person’s financial standing.
This rule would have prevented both current and future medical bills from appearing on most credit reports, offering broad protection and improving privacy for millions of Americans. It was seen as a major step toward separating healthcare crises from financial penalties.
However, in July 2025, a federal judge blocked the CFPB rule from taking effect. The judge stated it conflicted with the Fair Credit Reporting Act. As a result of this decision, medical debt will continue to appear on credit reports for the time being, and the proposed nationwide removal has been halted.
Recent updates affecting how medical bills appear on credit reports
Despite the blocked federal rule, several important changes made by the credit bureaus are still in effect and offer consumers some relief from the effects of medical debt. These updates significantly alter what medical debt information is included on your report.
These changes mean that smaller debts and paid-off collections no longer have a lasting negative impact on your credit. It’s also worth noting that 15 states have passed their own laws that further restrict or prohibit medical health care debt from being included on credit reports.
Here is a summary of the current rules for how medical debt is reported by each major credit bureau:
| Reporting Change | Description |
|---|---|
| Paid Medical Collections | Removed from credit reports upon payment. |
| Debts Under $500 | Medical collection accounts with an initial balance under $500 are not reported. |
| Grace Period | A 365-day waiting period is given before any unpaid medical debt can be reported. |
Medical Debt Collections and Your Credit Score
The real risk to your credit score begins when an unpaid medical bill is sent to a collection agency. This step, known as entering medical debt collections, is what triggers the potential for negative reporting. Debt collectors are the entities that report this information to the credit bureaus.
An account in collections can cause a substantial drop in your credit score. Even with the new protections in place for smaller debts, larger medical collections can still have a serious impact. Understanding what happens during this process is key to protecting your credit.
What happens when medical bills go to collections?
If you don’t pay a medical bill for an extended period, typically 90 days or more, your health care provider may decide to sell the debt to a collection agency. This means you no longer owe the provider directly; instead, you owe the debt collectors.
Once the account is with a collection agency, you will start receiving notices and calls from them requesting payment. However, the agency cannot immediately report this to the credit bureaus. They must wait for a full year (365 days) before the unpaid medical debt collections can be added to your credit file.
This one-year period gives you a final opportunity to resolve the debt before it impacts your credit. You can use this time to pay the bill, negotiate a settlement, or dispute any inaccuracies without your credit score being affected.
How collections impact your credit score
A medical debt collection on your credit history can seriously damage your credit score. According to Mark Pierce, Founder and CEO of Wyoming Trust & LLC Attorney, unpaid medical bills “can significantly tarnish one’s credit, potentially sinking a good credit score by up to 100 points.”
This drop can have lasting consequences, making it more difficult and expensive to get approved for mortgages, car loans, or credit cards. If the debt remains unpaid, the collection account can stay on your credit report for up to seven years from the date it first became delinquent.
The good news is that the damage isn’t always permanent. The three major credit bureaus will remove the collection account entirely from your credit report once it has been paid. This can lead to a relatively quick recovery for your credit score compared to other types of collections.
What Are Your Rights Regarding Medical Debt on Credit Reports?
You have rights when it comes to medical debt on your credit reports. Federal laws like the Fair Credit Reporting Act (FCRA) give you the power to ensure the information on your report is accurate and fair. If you find an error, you don’t have to accept it.
The Consumer Financial Protection Bureau also helps enforce these rights. Knowing how to dispute incorrect information and understanding the protections available to you is crucial for managing your financial health. Below, we’ll explore how to challenge errors and what federal laws protect you.
How to dispute medical debt listed on your credit report
If you discover a medical debt on your credit report that you believe is inaccurate—whether it’s the wrong amount, belongs to someone else, or has already been paid—you have the right to dispute it. The process is free, but you’ll need to file the dispute with each credit bureau that is reporting the error.
To start a dispute, you should gather any evidence you have to support your claim. This might include billing statements, proof of payment, or correspondence from your insurance company. The more documentation you provide, the stronger your case will be.
Here are the basic steps to file a dispute:
- Contact the credit bureaus: Submit a formal dispute with Experian, Equifax, and/or TransUnion online, by mail, or by phone.
- Notify the collection agency: Send a letter to the collection agency informing them that you are disputing the debt and requesting they validate it.
- Check your free credit report: After the investigation is complete (usually within 30 days), review your free credit report again to ensure the error has been corrected or removed.
Protections provided by federal law
Several federal laws provide a safety net for consumers dealing with medical debt. The most important is the Fair Credit Reporting Act (FCRA). This law grants you the right to see what’s in your credit file and to dispute any inaccurate information. Credit bureaus are required to investigate your claims and correct or remove any verified errors.
Another key piece of legislation is the No Surprises Act. This law protects you from unexpected, high-cost bills for out-of-network care during emergencies or at in-network facilities. By preventing many surprise bills from happening in the first place, it helps reduce the chances of unexpected medical debt.
The Consumer Financial Protection Bureau (CFPB) also plays a vital role. The agency supervises credit bureaus, enforces consumer protection laws, and creates new rules to make the financial system fairer for individuals. These protections work together to give you more control over how medical debt impacts your financial life.
Conclusion
Understanding how medical bills affect your credit is crucial for maintaining a healthy financial life. As we’ve explored, unpaid medical bills can indeed show up on your credit report and are treated differently from other types of debt. Recent changes in reporting laws may offer some relief, but it’s essential to know your rights and the potential impacts on your credit score. Staying informed and proactive about your medical debts can help you avoid negative repercussions. If you have any questions or need assistance navigating these complexities, don’t hesitate to reach out for support. Your financial health is important, and we’re here to help!
Frequently Asked Questions
If I pay off my medical debt, does it remove the negative mark from my credit report?
Yes. As of 2022, the three major credit bureaus (Equifax, Experian, and TransUnion) will completely remove a medical debt collection from your credit reports once it has been paid. This can have an immediate positive effect on your credit history and score.
How can I check if my medical bills are affecting my credit?
You can check by getting a free copy of your credit report from AnnualCreditReport.com. Review each credit bureau report for any accounts listed under “collections.” If you see a medical bill you don’t recognize or that should be paid, it may be negatively affecting your credit score.
What steps can I take to prevent medical bills from hurting my credit?
To prevent a medical bill from hurting your credit, review it for errors immediately. If you can’t pay the full amount, contact the provider to ask for a payment plan or see if you qualify for financial assistance. Also, understand your health insurance benefits to avoid surprises.