How does medical debt affect your credit score?

If you’re struggling to pay your medical bills, you’re not alone. Nearly half of all Americans are dealing with medical debt of some form, according to data. Many of them also say their debt is in collections.

How can this medical debt affect your credit?  If the debt is reported to the three major credit bureaus, Equifax, Experian and TransUnion, also known as the nationwide credit reporting agencies (NCRAs), lenders will weigh your debt as a risk factor, which could make it more difficult to obtain new credit or get the best interest rate on an auto loan or credit card. It can even put your chances of buying a home at risk.

Left unpaid or unaddressed, the debt can remain on your credit report for up to seven years, and debt collectors may continue efforts to collect the amount owed. That said, all debt is not created equal. As of July 2022, credit bureaus treat medical debt much differently than consumer debt. Read on to learn how.

Should I worry about medical bills in collections?

The short answer is you should treat any debt in a collection account seriously.

Outstanding medical debt can affect your credit scores negatively, making it harder to obtain credit in the future. Beyond credit rejection and higher interest rates for loans, a low credit score can make it more difficult to rent an apartment, land certain jobs or purchase insurance.

Start taking control of your medical debt by realizing there’s a solution out there that will fit your situation, whether that’s settling for a reduced amount or making partial payments over time. And the more the solution is customized to fit your needs, the more likely you’ll succeed. 

You should also realize credit reporting is one approach collections professionals use to encourage patient engagement on unpaid bills – an important first step to identifying billing errors, potential charity care eligibility, and more affordable settlement and payment plans.

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Can medical debt be included on my credit report?

Yes, providers and collection agencies can report your medical debt to all three credit agencies.

When medical debt is reported, it can have the same long-term, negative effect on your financial freedom as other debt. Until recently, even if you paid the debt, the item could remain on your report for years.

But that’s slowly changing, including a federal effort to decrease or eliminate medical debt as a part of government lending decisions, according to CNBC.

For example, debt typically appears on a consumer’s credit report 30 days after a payment is missed. As of mid-2022, agencies report unpaid medical debt only after it has remained in collections for a year. And when you pay off that medical debt, credit agencies must remove that debt information from your credit report.

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Are medical bills under $500 automatically removed from my credit report?

Additionally, by the middle of 2023, those struggling to pay medical debt can breathe a small sigh of relief. NCRAs will no longer report medical debt under $500.

Credit scoring company VantageScore is going a step further, dismissing both unpaid and paid medical debt altogether, no matter how much is owed or how long the debt has been in collections.

It’s important to remember, though, that you still owe the debt, regardless of its status or effect on your credit report.

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How can I get medical bills removed from my credit report?

With new reporting rules, removing some medical bills from your credit report should be relatively simple.

If the debt is under $500, the NCRAs should automatically remove the mark. If any of the three have not, reach out and request that they do so.

Medical debt above $500 can reach your credit report once enough time has passed. To remove that debt from your report, you must pay it off. Once you do, the NCRAs should remove the mark. In the past, even paid debt could linger on your report for up to seven years.

Beyond medical debt, it’s important to regularly review your credit reports to make sure the information is accurate and complete. Visit each agency’s website – Equifax, Experian, and Transunion – to learn how to view your report. As of this article’s publishing, free weekly online credit reports for each NCRA are available at

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How can I pay off my medical debt before it is reported?

Start by reaching out to whomever you owe the debt, whether that’s your provider or a collection agency. Prepare for that conversation by reviewing your medical bills, checking each for accuracy, and considering any payment options available. Know that both want to help you resolve the debt and should help you find a payment solution you can afford.

Consider tools like the BuoyFi Calculator to help. Easy and intuitive, the calculator will design a plan that works for you. It can determine if you are possibly eligible for debt reduction, will recommend affordable settlement and payment plans based on your income, which could make all the difference.

Simply having a plan that works for you will boost your confidence and make negotiating with your provider or collections agency more comfortable.

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BuoyFi can help

If you need help, BuoyFi is here for you. We offer a suite of tools, educational content and access to medical bill advocates who can help you avoid future monetary challenges while simultaneously taking control of your finances and planning for future unexpected medical expenses.

We’re happy to help you figure out how to pay your unpaid medical bills affordably, recommend personalized plans to help you take the first step toward financial freedom and provide you with the financial tools to maintain that freedom.

Ready to take the first step? Download the BouyFi app today.