How Can I Get Medical Bills Off My Credit Report?

Medical bills can lead to unexpected financial challenges, and their presence on a credit report can be a concern for many consumers. Understanding how these debts are reported and the available pathways to address them is important for financial well-being. Specific processes and recent regulatory changes can help consumers manage medical debt reporting.

How Medical Bills Impact Credit Reports

Medical bills typically do not appear on credit reports immediately. Healthcare providers generally do not report directly to the three nationwide credit bureaus: Equifax, Experian, and TransUnion. Instead, a medical bill usually only appears on a credit report if it goes unpaid and is subsequently sent to a collection agency.

Historically, a 180-day waiting period existed before unpaid medical bills could be reported. As of July 1, 2022, this period increased to one year, or 365 days, providing consumers more time to resolve the debt.

Significant changes in 2022 and 2023 affected how medical debt appears on credit reports. Effective July 1, 2022, paid medical collection debt is no longer included on consumer credit reports. As of April 2023, unpaid medical collection debt with an initial reported balance under $500 is also removed from credit reports.

These changes removed a large percentage of medical collection accounts from credit files, benefiting many individuals. When medical debt does appear on a credit report, it can still negatively affect credit scores. However, the removal of such debt, particularly paid or smaller amounts, can lead to an improvement in credit scores, potentially by an average of 20 points.

Proactive Measures to Prevent Credit Report Issues

Taking action before a medical bill becomes a collection account can help prevent it from affecting your credit report. First, thoroughly review all medical bills received from healthcare providers. Compare these bills with the Explanation of Benefits (EOB) provided by your health insurance company.

This careful review helps identify potential discrepancies, such as incorrect charges, duplicate billing, or services not rendered. If an error is found, contact the medical provider directly to clarify billing and seek corrections. This can resolve issues before they escalate.

Appealing insurance denials is another important proactive measure. If your insurance company denies coverage for a service you believe should have been covered, you have the right to appeal. Working with both your provider and insurer to resolve coverage disputes can ensure proper payment and prevent the bill from becoming your responsibility.

For legitimate bills that are difficult to pay, contact the medical provider to negotiate a payment plan. Many providers offer options to pay off balances over time, sometimes without interest. Establishing such an arrangement can keep the account in good standing and prevent it from being sent to collections.

Steps for Removing Inaccurate or Paid Medical Debts

If a medical debt appears on your credit report and is inaccurate or paid, specific steps can address it. For inaccurate debts, dispute the information directly with the three major credit bureaus: Experian, Equifax, and TransUnion. Disputes can be initiated online, by mail, or over the phone.

When filing a dispute, clearly explain the inaccuracies and provide supporting documentation. This documentation might include:
Copies of the original medical bill
Explanation of Benefits (EOB) from your insurer
Proof of payment, such as bank statements or canceled checks
Correspondence with the medical provider or collection agency

Credit bureaus are required to investigate your dispute within 30 to 45 days. They will contact the entity that reported the information to verify its accuracy.

For medical debts that have already been paid, regulations mandate their removal from credit reports. This removal should occur automatically once the payment is processed and reported.

Even with automatic removal policies, regularly monitor your credit reports from all three bureaus. This practice allows you to confirm that paid medical debts have been removed. If a paid medical debt still appears, initiate a dispute with the credit bureau, providing proof of payment.

What to Do About Unpaid Medical Debts Over $500

For accurate, unpaid medical debts exceeding the $500 threshold, they can still appear on your credit report. Engaging with the collection agency is the primary course of action. You can negotiate the amount owed or establish a manageable payment plan.

When negotiating, you might settle the debt for a lower amount than the original balance. Collection agencies may accept a reduced sum, especially if you offer a lump-sum payment. Some negotiations might lead to a settlement comparable to what an insurance company would pay for the same services.

If a lump-sum payment is not feasible, propose a payment plan that fits your budget. Many collection agencies are open to working with consumers to set up installment payments. Get any agreed-upon terms, whether a reduced settlement or a payment plan, in writing before making any payments.

Once an agreed-upon amount for an unpaid medical debt over $500 is paid, the debt should be removed from your credit report. This provision incentivizes consumers to resolve outstanding balances. Paying these legitimate debts can lead to their removal, potentially improving your credit standing.