Does Medical Debt Affect Your Credit Score?
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Healthcare issues like a fever or injury can happen anytime. However, these health issues can bring a whopping medical debt that can strain your finances. The relief? You aren’t alone! Statistics show that approximately 14 million people (6% of adults) in the U.S. owe over $1,000 in medical debt. That’s why many people stress about is, “Does medical debt affect your credit score?”
A credit score is an important financial metric that helps lenders and other financial institutions determine your financial credibility. If your score falls below a specific category, you may not appear creditworthy, making it hàrder to qualify for loans. Therefore, it’s important to check whether medical debt hurts scores and how to manage it.
This article will provide a detailed answer to the question, “Does medical debt affect your credit score?” along with practical tips on managing your healthcare expenses. Continue reading!
What is Medical Debt?
So before discussing, “Does medical debt affect your credit score,” let’s first look at what medical debt actually is:
Typically, a medical debt refers to any outstanding medical bills that you cannot afford to pay. It’s different from other types of debt as it’s incurred accidentally and is unavoidable. Some common examples of medical debt include:
- Hospital visits
- Ambulance ride
- Doctor and dentist appointments
- Medicines
- Surgeries
- Medical equipment and much more
The SIPP survey suggests people in the United States owe at least $220 billion in medical debt.
How Does Medical Debt Work?
The working of medical debt is quite simple: if you fail to pay medical bills on time, the provider will try to collect the money by giving you reminders via phone and email.
If you ignore these notifications for several months, they are left with no choice but to contact a medical bill collection agency.
The agency then gets into action by contacting you as well as your insurance provider to recover unpaid medical bills and may take legal action for further delay.
Note: While insurance can cover a certain amount of your medical bills, there may still be copays and deductibles to meet, especially if the policy doesn’t cover specific treatments. That’s why you should always be prepared to pay the additional amount to avoid penalties.
Does Medical Debt Affect Your Credit Score?
So, does medical debt affect your credit score? The simple answer is NO! However, before discussing that, let’s first look at the past regulations of medical debt and its impact on your credit report:
Previously, unpaid medical debt was reported to the debt collection agency. It then reports your financial behavior to the three major credit reporting bureaus: Equifax, Experian, and TransUnion. The outstanding medical bills used to appear on your credit report, showing potential lenders that you could not pay off money on time.
However, in 2023, the national credit reporting agencies enacted a rule that prevented medical bills under $500 and less than a year to show on your credit report. The ultimate goal was to help as many Americans as possible maintain a good credit score and get more grace time to pay off all their debts.
According to Equifax, this change eliminated nearly 70% of medical debt from different credit reports. It’s important to know that this rule didn’t eradicate medical debt completely, and any debt over $500 could still be on your credit report and stay there for seven years.
New Policy
Fortunately, the Consumer Finance Protection Bureau worked continuously to fulfill its promise of providing protection to people suffering from medical debt. In January 2025, they approved a new regulation that prevents medical debt from appearing on the credit report. It doesn’t matter if you owe $350 in medical debt or as high as $1000; this will not impact your credit score. This new regulation states that:
Lenders aren’t allowed to consider the medical information of a borrower when giving out a loan and shouldn’t use medical equipment or prosthetics as collateral.
Consumer reporting agencies cannot add medical bill dates on credit reports.
The CFPB Director said,
“People who get sick shouldn’t have their financial future upended.”
The CFPB expects that this new rule will result in the approval of 22,000 additional affordable mortgages every year. On top of this, Americans with medical debt on their credit reports can see their score rising by a huge 20 points.
The best part is that CFPB estimates that this rule change will remove around $49 billion in medical bills from the credit score reports of about 15 million Americans.
How to Check Your Medical Debt on Credit Report?
Although there are no chances of medical debt showing on your credit report ever since the new 2025 rule became effective, if you still want to check whether the debt is there or not, here are the tips:
Know Your Debt
Now that you understand “How does medical debt affect your credit score,” the first step for checking it on your credit report is to know your accurate debt. You should have proper knowledge of how many medical bills you have unpaid and the collection agency name. With this information, you can easily identify whether medical debt is present on the credit report.
Check Credit Reports
Another thing you should do after knowing, “Does medical debt affects your credit score?” is to regularly review your credit reports from the top three bureaus.
PFScores is a reliable platform for analyzing credit and risk management and creating a personalized credit report. You can view your current credit score, outstanding balances, medical debt, and even the names of open accounts.
Flag any Medical Debt or Inaccuracy
As mentioned earlier, your credit report is a deciding factor when acquiring a loan or new property. Therefore, you must ensure that it’s free of errors and wrong entries.
For instance, if you see any medical debt that’s either above or less than $500, contact the respective bureau to get it removed from your report. You can either file disputes yourself or hire a credit repair agency to do this on your behalf.
How to Repay Medical Debt?
Do you want to repay your medical debt and are looking for some lenient conditions or plans? Here are some points that can help:
Try to Negotiate
It may seem silly at first, but you don’t know that negotiation can do wonders. How? So, let’s face the reality: your lender is looking for their money and is more than willing to get paid something rather than nothing.
That’s your perfect chance to strike the final blow and ask them if they can reduce the charges you owe.
Hospitals and other medical facilities have special policies that can offer discounts to borrowers if asked. Statistics show that nearly 6 in 10 Americans with medical debt have negotiated at least one of their medical bills, with 93% reporting they had at least some success.
Request a Repayment Plan
In some instances, the medical provider may also agree to spread out your debt in affordable monthly installments. It is better to have a number in mind yourself, factoring in your salary and savings and not solely relying on the other person. There are high chances that you will get a low or no-interest installment plan that’s in the interest of both parties.
Seek Help
After knowing “How does medical debt affect your credit score,” it’s fair to seek help to get rid of all the money you owe. Here are different ways you can get help:
Contact your friends and family to ask if they can help you financially in this difficult time and get rid of all the debt.
If you aren’t good at negotiation, don’t try it. Instead, simply hire an individual or company to negotiate on your behalf and get the best deal for you.
Reach out to the National Foundation for Credit Counseling to receive assistance and advice on managing your medical debt.
Try to get medical credit cards or loans that can cover your debts and also come at a lower interest rate than traditional financing options.
Research Government or Non-Profit Organizations
Another thing that you can do is to check if you qualify for Medicaid and other government incentives.
You may also contact organizations like Undue Medical Debt and Patient Advocate Foundation, which help people struggling with medical debt.
They can provide you with financial assistance, negotiate bills on your behalf, and even guide you toward relief programs so you can pay off medical debt without impacting your financial stability.
You may also get in touch with debt relief companies like Freedom Debt Relief, which is suitable for people who have over $20,000 in medical debt. Other than that, National Debt Relief is suitable for those individuals who have $10,000 in unsecured debt and cannot pay any upfront fees.
Tips to Tackle Medical Debt
Once you become aware of “Does medical debt affect your credit score?” you must look for some effective tips to tackle your debt. If so, here are some of them:
Plan Ahead
While it’s impossible to plan for medical bills ahead of this time, you should still do your homework where possible.
For instance, if you are undergoing planned surgery, you should ensure that the hospital and doctor you rely on are covered by your insurance.
In case you feel overwhelmed and cannot decide on the right medical service provider, you can talk with your company’s benefits coordinator to help you pick a solution that aligns with your coverage.
Read and Review Everything
After learning “How does medical debt affect your credit score” and how to mitigate its impacts, you should also read and review every document.
Open all the bills and statements for a detailed analysis.
If you are unwell, ask your friends or family to take over and go through all the documents, whether the actual bill or the Explanation of Benefits, so you have clarity about your expenses.
Follow Up on Everything
Billing machines are based on codes and digital systems, which means mistakes can happen. However, you can keenly review every item in the provided statements to make sure that all charges are actually yours.
For instance, if you see that you are billed for a medicine that you didn’t even receive, don’t hesitate to call the healthcare professional right away.
In the same way, if you think you are charged for an item like medical equipment that was covered by your insurance, contact the insurer and get things sorted. This ensures you have no outstanding debts and maintain a strong financial standing.
FAQs
Medical debt doesn’t affect your credit score at all since the Consumer Finance Protection Bureau introduced a new regulation in January 2025. It states that credit scoring companies cannot list an individual’s medical debt in their report regardless of the duration of the debt and the amount owed.
The new federal rule for medical collections on credit reports prohibits credit reporting companies from including medical debt on credit reports. This rule also prevents lenders from using the medical bills of an individual in their lending decisions.
The consequences of unpaid medical bills range from legal actions by the medical provider to recover their amount to bankruptcy. On top of this, it causes severe financial stress that takes a toll on your mental as well as physical health.
Conclusion
Does medical debt affect your credit score? The simple answer is no! However, if you are still unsure and want to look at your credit score and report, PFScores is the ideal platform. It develops a detailed credit report by considering your savings discipline, credit, and risk management.
The whole procedure takes merely 10 to 15 minutes to complete and includes your score and ranking against other users. The report explains how your credit score is calculated to give you a better overview of your financial standing.