Is Medical Debt Reported to Credit Agencies?

Medical debt can be a significant concern, often arising unexpectedly. Understanding how these financial obligations interact with credit reports is important for financial well-being. The way medical debt is handled by credit reporting agencies has evolved, so understanding the current landscape and its impact on your financial standing is key.

How Medical Debt Appears on Credit Reports

Medical debt does not appear on credit reports immediately. Most healthcare providers do not directly report to Equifax, Experian, and TransUnion. Instead, medical bills typically go through a process before impacting your credit history.

If a medical bill remains unpaid, the original healthcare provider may sell the debt to a third-party collection agency. These agencies report delinquent accounts to credit bureaus. A grace period of one year (365 days) exists before unpaid medical collection debt can appear on a credit report. This provides consumers time to resolve the debt with their provider or insurance company before it impacts their credit file.

Changes affect smaller medical debts and paid medical collections. As of April 2023, medical collection debt under $500 is no longer included on U.S. consumer credit reports. Effective July 1, 2022, any medical collection debt that has been paid off is removed from credit reports. Once satisfied, a medical collection should no longer appear on your credit file.

Effects of Medical Debt on Credit Scores

When medical debt is reported by a collection agency, it can influence an individual’s credit score, similar to other collection accounts. Its influence varies based on debt amount, reporting date, and overall credit history. Recent adjustments to how medical debt is treated by credit scoring models have provided some consumer relief.

Newer credit scoring models, like FICO Score 9, refine how medical collections are treated. FICO 9 disregards all paid collection accounts and differentiates between unpaid medical and non-medical collections. This distinction means unpaid medical collections have a smaller impact on the FICO Score than other unpaid debt. Consumers whose only significant credit issue is a medical collection could see their median score approximately 25 points higher with FICO 9.

VantageScore models 3.0 and 4.0 eliminate all medical collection data from credit score calculations. Implemented by early 2023, this means medical collections, regardless of amount or age, should not factor into these specific VantageScore calculations. Despite these model-specific changes, a July 2025 federal court ruling blocked a broader CFPB rule to remove all medical debt from credit reports, meaning medical bills can still appear on credit histories.

Steps to Address Medical Debt on Credit

One initial step to address medical debt is to regularly review your credit reports from all three major bureaus: Equifax, Experian, and TransUnion. You are entitled to a free copy from each agency annually. Reviewing these reports allows you to identify medical debt entries and verify their accuracy.

If you discover inaccuracies or outdated medical debt information on your credit report, you have the right to dispute these entries. The dispute process involves gathering supporting documentation, like payment records or insurance explanation of benefits, and submitting a formal dispute to the credit bureau. Bureaus are required to investigate disputes and respond within 30 days.

For valid medical debts sent to collections, negotiation with the collection agency is possible. You might settle the debt for a lower amount than originally owed. While not guaranteed, some collection agencies may agree to a “pay-for-delete” arrangement, removing the negative entry from your credit report upon payment. Get any such agreement in writing before making a payment.

Paid medical collection accounts are removed from credit reports, a significant benefit. If you pay off a medical collection, ensure it is accurately reflected and removed. Proactively prevent medical debt from impacting your credit by reviewing medical bills for errors and understanding your insurance coverage. If you cannot afford to pay a bill, communicate with the healthcare provider to negotiate a reduced amount or set up a payment plan to prevent the debt from going to collections.

In complex situations, seeking assistance from a credit counselor or financial advisor can provide tailored guidance. These professionals can help you understand your options, negotiate with creditors, and develop a plan to manage medical debt. Many hospitals also offer financial assistance or “charity care” programs for eligible individuals, which can significantly reduce or eliminate medical bills.