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Your medical debt might impact your credit score, but not always. If you’ve missed several payments and your healthcare provider sells your debt to a collection agency, those bills could hurt your credit—but only if your outstanding balance is over $500 and at least a year old, thanks to a 2023 rule.
Here’s what to know about medical bills and how they can affect your credit, plus some tips to help you tackle them.
Key Takeaways
- Paid medical debts, and debts under $500 and less than one year old, should not appear on credit reports, per recent changes.
- Unpaid medical debts could stay on your credit reports for up to seven years, but not always.
- The CFPB has proposed that all medical bills be removed from Americans’ credit reports.
- Several strategies can help those struggling with medical debt to repay their bills.
How Long Does Medical Debt Stay on Credit Reports?
Medical bills owed to a healthcare provider (your primary care physician, a specialist, a hospital, etc.) will not show up on credit reports, and will not affect your credit.
Unpaid medical debt, however, may be sold to a collection agency, and debt owed to collection agencies is generally reported to the three major credit bureaus: Equifax, Experian, and TransUnion.
Today, thanks to recent changes enacted by the credit bureaus, only medical debts in collections that are greater than $500 and older than one year should appear on credit reports, as explained in more detail below. Those past-due accounts can stay on your credit reports for up to seven years. This is a welcome change for many Americans struggling with debt, and the Consumer Financial Protection Bureau (CFPB) aims to offer further protection in the coming years.
The CFPB notes that these new rules do not cover credit card collections, even if you used your credit card to pay for healthcare expenses. If you use a credit card to pay for healthcare, that account will show up on your credit reports whether it goes to collections or not.
2023 Rule Removes Debts Under $500
In 2023, the national credit reporting agencies enacted a rule that prevents medical debts under $500 from appearing on your credit reports. This rule is designed to prevent smaller debts from hurting your credit and will help alleviate credit score damage for many Americans. Per CFPB estimates, the change will affect roughly half of people with past-due medical bills on their credit reports.
In addition, paid medical debts and those less than a year old no longer appear on your credit reports. This change happened in July 2022. That means if you’ve struggled with unpaid healthcare bills in the past, those accounts will drop off your credit reports once you’ve paid your balances in full. You also have a year-long grace period to pay any new bills before they start to affect your credit.
In June 2024, the CFPB proposed banning all medical debts from credit reports. If approved, this change could help more than 15 million Americans whose medical debt affects their credit scores.
How to Check for Medical Debt on Credit Reports
If you’re wondering whether your medical debt appears on your credit reports, it’s simple to check. Here are the steps you’ll need to take.
- Understand your debts: If you have a debt that’s significantly past due and in collections, knowing the balance and the collection agency’s name can help you identify it on your credit reports.
- Check your credit reports: You can check your Equifax, Experian, and TransUnion credit reports for free each week by visiting AnnualCreditReport.com (reports must be available at least annually by law, but have been available weekly since the coronavirus pandemic). Your reports will show your outstanding balances and names of open accounts. You can also use one of many credit monitoring services to view information on credit reports.
- Flag any medical debts that are either paid, under $500, or less than a year old: If you notice any medical collection accounts that are paid, less than $500, or less than one year old, make a note to get them removed.
- Dispute those accounts with credit bureaus: If you found any of the above types of medical debt on your credit reports, you can dispute them with the credit reporting agencies to get them removed. You can file disputes yourself with each credit bureau, or you can hire a credit repair company to help.
Checking your credit reports regularly is a wise move that could help protect you from fraud and identity theft, along with allowing you to identify and fix inaccurate account information that could make it more difficult to qualify for credit cards, loans, and other products.
Tips for Tackling Medical Debt
The CFPB estimates that one in five American households struggles with medical debt in collections. If you’re overwhelmed by healthcare bills, here are some strategies that could help.
- Set up a repayment plan: Contact your healthcare provider to discuss repayment plan options. Many providers will let you pay off your medical bills over time if you’re struggling.
- Negotiate with your healthcare provider: Alternatively, you could try negotiating down your debt with your healthcare provider. Some providers might agree to accept a reduced amount.
- Hire a medical billing advocate: Medical billing advocates, sometimes called patient advocates, can help you create a repayment plan for your debts and will negotiate with providers on your behalf. Many hospitals have in-house patient advocates, or you could work with a reputable non-profit like the Patient Advocate Foundation.
- Use a 0% APR credit card to pay your debt: If you have decent credit, a credit card with a 0% introductory annual percentage rate (APR) offer could help you pay off your medical debt. These cards often give you a 0% rate for 12 or 18 months, so you can spread out your payments over time. Just ensure you can repay your full balance before the introductory APR expires, or you could end up with significant interest charges.
- Consider debt settlement: Consider debt settlement as a last resort, as it will harm your credit and cost you money. There’s also no guarantee a debt settlement company will be able to resolve your healthcare debts. For many people, this option is an alternative to filing for bankruptcy, although bankruptcy could be a better choice in certain situations.
Frequently Asked Questions (FAQs)
How Can I Remove Medical Bills From My Credit Reports?
You can remove medical bills of certain types: paid medical debts, medical debts less than a year old, and medical debts under $500. As of the date of publication, medical debts over one year old or over $500 cannot be removed from your credit report until you’ve repaid them. If a medical debt appears on your credit reports when it shouldn’t, you can file a dispute with the credit bureaus on your own or with the help of a credit repair company. But the above rules could change, because in June 2024, the CFPB proposed removing all medical debts from credit reports.
Should I Pay a Medical Debt That Is Not on My Credit Reports?
Medical debts over $500 sent to collections will not appear on your credit reports for one year, thanks to a grace period offered by the credit reporting agencies. But if you owe your healthcare provider money, it’s important to try to repay your debt. Consider working with the provider to formulate a manageable repayment plan before the medical debt starts to affect your credit.
How Long Does Unpaid Debt Affect My Credit Score?
If you have unpaid debts, they could remain on your credit reports and affect your credit score for up to seven years. But as mentioned, only medical debts sent to collections that are over $500 and over one year old will appear on your credit reports and affect your score. Debts that do not appear on your credit reports will not affect your credit score.
What Factor Has the Biggest Impact on Your Credit Score?
Your payment history has the biggest impact on your credit scores. Lenders frequently rely on the FICO and VantageScore models to evaluate consumers’ credit. Payment history accounts for 35% of your FICO score and 41% of your VantageScore, so consistently paying your bills on time can lead to better scores.
How Much Do Americans Owe in Medical Debt?
A 2024 report by the Kaiser Family Foundation and the Peterson Center on Healthcare estimates that Americans owe a total of $220 billion in medical debt. According to the study, about 14 million Americans owe more than $1,000 in medical debt, and 3 million people owe more than $10,000.
The Bottom Line
Medical debt can impact your credit, but whether it does or not depends on the amount you owe, how long your balance has remained unpaid, and whether your healthcare provider has sent your debt to collections. Fortunately, the CFPB, Congress, and other federal agencies are taking steps to alleviate the impact of medical debt on Americans’ credit scores, including a recent proposal to remove all medical bills from credit reports.
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