Medical Debt and Your Credit Report

It’s no surprise that consumers are contacted by debt collectors about medical bills more than any other type of debt.¹ After all, the complex world of medical billing and collection practices is extremely difficult to navigate. Many people have trouble understanding what the various billing codes on a medical bill even mean.

Historically, this has led to consumers racking up unpaid medical bills because they were unaware of what they owed or were in the process of disputing what they owed to their health care provider. These unpaid bills were then often reported to credit bureaus, negatively impacting credit reports.

Fortunately, there have been changes to the way medical debt is reported on credit reports. As of July 1, 2022, the three nationwide credit reporting companies (Equifax, Experian, and TransUnion) no longer include medical debt that was paid after it was sent to collections.

The credit reporting companies have also increased the amount of time before medical debt in collections appears on credit reports, extending it from six months to one year. This additional time is meant to give consumers the opportunity to settle any disputed charges or work out a payment plan with their health care providers.

Finally, as of April 11, 2023, the credit reporting companies no longer include medical debt in collections of less than $500 on credit reports. It’s estimated that with this last step, roughly half of those with medical debt on their credit reports will have it removed from their credit history.²

If you have unpaid medical bills, there are some steps you can take to make sure that they aren’t negatively impacting your credit. First, check your credit report. You have the right to request one free copy of it every week from each of the three major consumer reporting companies at AnnualCreditReport.com.

Once you obtain your credit report, make sure that any medical bill that is under $500, less than a year old, or has been paid off no longer appears on your credit report. If you find a medical billing error (or any other error), you have the right to dispute it by contacting both the credit reporting company and the company that provided the erroneous information. You can also file a complaint with the Consumer Financial Protection Bureau at consumerfinance.gov.