Can Medical Bills Be Put on Your Credit?
Learn how medical bills affect your credit score, including unique reporting rules and recent policy changes.
A credit report details an individual’s financial behavior, including payment history and accounts held. A credit score, derived from this report, represents creditworthiness. Unpaid debts can negatively influence these scores, potentially making it harder to obtain new credit or favorable interest rates. Medical debt, however, falls into a specific category with unique considerations regarding how it appears on credit reports and its effect on credit scores.
Medical Bills and Credit Reporting Agencies
Medical bills typically do not appear directly on a consumer’s credit report from the healthcare provider itself. Hospitals, clinics, and individual practitioners are generally not direct data furnishers to the three major credit bureaus: Equifax, Experian, and TransUnion. Instead, if a medical bill remains unpaid for an extended period, the healthcare provider may sell the debt to a third-party collection agency. It is this collection account, initiated by the collection agency, that may then appear on a consumer’s credit report as a derogatory mark, not the original bill.
An unpaid medical bill typically reaches a collection agency within 90 to 180 days, allowing for initial billing cycles and insurance processing. If the bill remains unresolved, the provider may decide to send the debt to collections, even if a patient is actively disputing it. Once placed with a collection agency, that agency has the discretion to report the delinquency to the credit bureaus. This means the original medical bill itself is not reported, but rather the subsequent collection activity.
Rules Governing Medical Debt Reporting
The landscape of medical debt reporting has undergone significant transformation, culminating in recent federal action. Historically, a 180-day grace period applied before unpaid medical debt appeared on credit reports. Subsequent changes, effective July 2022, led to the removal of fully paid medical collection accounts. From early 2023, unpaid medical collection debt under $500 was generally no longer reported by Equifax, Experian, and TransUnion.
However, a more comprehensive federal rule was finalized in January 2025 by the Consumer Financial Protection Bureau (CFPB). This new regulation, set to take effect in March 2025, broadly prohibits consumer reporting agencies from including any medical debt information on credit reports. It also bans lenders from using medical information in their lending decisions, fundamentally altering how medical bills interact with credit.
The rationale for these sweeping changes is that medical debt often arises from unexpected circumstances and is not a reliable indicator of financial responsibility. This federal action aims to remove an estimated $49 billion in medical bills from credit reports, potentially boosting credit scores by an average of 20 points for approximately 15 million Americans. This establishes a near-complete ban on medical debt appearing on credit reports for lending purposes.
Effect of Medical Debt on Credit Scores
Prior to the comprehensive ban, unpaid medical collection accounts could still influence an individual’s credit score. However, their effect was often less severe than other types of collection accounts like credit cards or auto loans. This distinction was made because medical debt is often incurred involuntarily and may not reflect a consumer’s general credit risk.
Newer credit scoring models, such as FICO Score 9 and VantageScore 3.0 or 4.0, had already begun to treat medical collections differently. FICO Score 9 disregarded all paid collection accounts and weighed unpaid medical collections less heavily than other unpaid debts. VantageScore models 3.0 and 4.0 generally eliminated medical collection data from their credit score calculations.
The new federal rule ensures that medical debt, regardless of its amount or payment status, will not be a factor in credit scores for lending decisions. This change is expected to provide a significant boost to the credit scores of many individuals. Consumers should still regularly review their credit reports from each of the three major bureaus for accuracy, ensuring any medical debt is correctly excluded and to dispute inaccuracies.