Medical Debt Collection and Your Credit Score

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Well, here’s a shocker—the cost of healthcare is getting more expensive all the time—much more. And with the highest inflation rate in forty years draining people’s purchasing power, more Americans are finding it harder to pay their medical bills too. It wasn’t much easier in 2021. The Kaiser Family Foundation found that four in 10 Americans with employer-sponsored health insurance had problems paying medical bills. And 40% of adults who struggled to pay medical debt said their credit rating suffered as a result.

Unpaid medical debt can negatively impact your credit score because, by the time it shows up on your credit report, the debt has already gone to collections. Having an account in collections can seriously affect your credit score, even if you are actively making payments on the debt. But credit reporting agencies have made some significant changes that will help protect your credit rating.

On July 1, 2022, the three national reporting agencies—TransUnion, Equifax and Experian changed the way they report medical collection debt. Now,

  • Paid medical collection debt will no longer show up on credit reports.
  • The time period before unpaid medical collection debt appears on your credit report has been increased from 6 months to one year.
  • The extension provides additional time to pay off medical debt before it appears on credit reports.
  • Beginning in 2023, the three reporting agencies will no longer include medical debt collections under $500.


Under the old system, if a healthcare provider gave your overdue account to a collection agency, the agency could report it to the credit agencies after 180 days and it appeared on your credit record and decreased your score.

Medical billers and insurance companies make mistakes, and criminals may steal your identity to get medical care. If you have medical collections on your credit report that are not accurate or are the result of fraud, you can dispute them with the credit bureaus. If the dispute is settled in your favor, the accounts can be updated or removed from your credit report.

These disputes are free to file and will need to be filed separately with each bureau that lists the incorrect information. Be prepared to provide evidence of your claim. For example, you might need records from the collection agency, insurance company, or health care provider, copies of canceled checks, or a credit card statement showing that the bill has been paid.

Other things you can do to keep medical debt from tarnishing your credit record:

  • When you receive your bill, be sure to examine it carefully and compare it with the explanation of benefits provided by your health insurance provider. If you believe you’ve found an error, contact your medical provider or health insurance company. Ask for an itemized bill so you can better understand what you’re being charged for.
  • Regularly review your credit reports to make sure the information is accurate and complete.
  • Contact your health insurance company. Know your coverage and follow up to make sure the company is paying costs it has agreed to cover.
  • Negotiate with your health provider. If you can’t afford to pay a bill, try to work with your medical provider to reduce the amount owed or set up a payment plan.
  • If you believe medical debt has been listed on your credit report mistakenly, contact the medical provider or collection agency first. You can also file a dispute with the three nationwide credit bureaus.
  • If possible, prepare for medical procedures in advance by finding out what your insurance will cover and what costs are your responsibility.


Keeping track of your credit report is not the most exciting thing to do, but it can save you from a tarnished credit record that limits your financial success.

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