Can medical debt hurt your credit score? Many people assume that unpaid medical bills only affect their relationship with healthcare providers, but medical debt can significantly impact credit health. In fact, medical collections have historically been one of the most common negative marks on credit reports.
The good news is that new laws are making it easier for consumers to protect their credit from medical debt. In 2025, several reforms have been introduced to limit the impact of medical collections, improve consumer protections, and make it easier to remove from credit reports.
This guide will walk you through the latest medical debt laws, how medical bills affect your credit, and the steps you can take to manage or dispute medical collections. Whether you are struggling with past-due medical bills or want to safeguard your credit score, understanding these changes is key to financial stability.
1. Medical Debt and Your Credit Score
Medical debt is one of the most common financial burdens for Americans, yet many people are unaware of how it affects their credit scores. Unlike credit card debt or personal loans, medical expenses often arise unexpectedly, leaving individuals struggling to keep up with payments. While medical bills do not initially appear on credit reports, unpaid medical debt can lead to serious credit consequences if it is sent to collections.
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1.1 How Medical Debt Impacts Your Credit
Medical debt does not immediately impact your credit, but if left unpaid, it can cause long-term financial damage. Healthcare providers generally allow a grace period before sending an unpaid bill to a collections agency. However, if the bill remains unpaid beyond this period, the collection agency may report it to Experian, Equifax, and TransUnion, negatively affecting your credit score.
Here is how can impact your credit profile:
- Collections Accounts – Once a medical bill is turned over to a debt collection agency, it may be reported to the credit bureaus and can remain on your credit report for up to seven years, even if you later pay it off.
- Credit Score Drop – The negative impact of medical collections varies depending on your existing credit profile. A medical collection account can lower your score by 50-100 points, with larger drops for individuals who previously had excellent credit.
- Loan and Mortgage Approval Issues – Lenders often review credit reports to assess financial responsibility. A history of medical collections can make it harder to qualify for credit cards, auto loans, personal loans, and mortgages. Some lenders may offer loans but with higher interest rates and less favorable terms.
1.2 Do Medical Collections Count the Same as Other Debt?
Medical debt is handled differently than other forms of debt because it is often unplanned and incurred due to emergencies. Recognizing this, credit scoring models have adapted how they treat medical collections:
- FICO 9 and VantageScore 4.0 – These newer credit scoring models reduce the impact of medical collections compared to other unpaid debts. Additionally, they completely ignore paid medical collections, meaning once the debt is resolved, it no longer affects your score.
- FICO 8 and Older Models – Many lenders still use FICO 8, which treats medical collections the same as credit card or loan delinquencies. This means that even a small unpaid medical bill can significantly impact your credit if reported under an older scoring model.
How the 2025 Credit Reporting Changes Affect Medical Debt
With recent policy changes, it no longer carries the same weight on credit reports. In 2025, the following reforms were implemented:
- Paid Medical Debt Must Be Removed from Credit Reports – As soon as a medical collection is paid off, it must be erased from your credit report.
- Medical Debts Under $500 No Longer Appear on Credit Reports – This prevents minor bills from damaging credit scores.
- One-Year Waiting Period for Reporting Medical Debt – Before a medical bill can be reported as a collection, credit bureaus must now wait 12 months, giving consumers time to resolve billing issues or negotiate payments.
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These changes mean that medical debt no longer affects credit scores as harshly as before, but it is still important to manage it properly to avoid long-term financial consequences.
2. New Medical Debt Laws in 2025
Medical debt has long been a burden for millions of Americans, often leading to credit score damage, collection agency harassment, and financial instability. In response to growing concerns, new laws in 2025 are reshaping how is reported and handled by credit bureaus. These changes aim to provide greater consumer protections, prevent unfair credit damage, and offer more time for resolving medical bills before they impact credit scores.
2.1 Key Medical Debt Reforms
The latest laws have introduced several major changes that protect consumers and make it easier to remove medical collections from credit reports.
- Paid Medical Debt Must Be Removed from Credit Reports
- As of 2025, medical collections that have been paid off must be completely removed from all three major credit bureaus, Experian, Equifax, and TransUnion.
- Previously, paid medical collections could remain on a credit report for up to seven years, continuing to lower credit scores even after resolution.
- Medical Debt Under $500 No Longer Reported
- Any unpaid medical debt below $500 will not appear on credit reports.
- This change helps protect consumers from minor billing disputes and medical expenses that often result from insurance delays or unexpected fees.
- One-Year Waiting Period Before Reporting Medical Bills
- Credit bureaus must now wait at least 12 months before adding a medical collection to a credit report.
- This gives patients more time to dispute bills, apply for financial assistance, or work out payment plans before affects their credit score.
- Previously, medical debt could be reported to credit bureaus within six months, which often penalized individuals dealing with insurance disputes or financial hardship.
- Consumer Financial Protection Bureau (CFPB) Medical Debt Rules
- The CFPB is actively working on banning medical debt from credit reports entirely.
- While this regulation has not yet been finalized, the goal is to remove it from credit scoring calculations, ensuring that unexpected healthcare costs do not unfairly damage consumer credit.
These reforms significantly reduce the impact of medical debt on credit scores and provide greater flexibility for consumers to manage their healthcare expenses.
2.2 No Surprises Act and Consumer Protections
The No Surprises Act is another critical law designed to protect consumers from unexpected medical bills. It was originally passed in 2022 and continues to be expanded to prevent unfair billing practices that lead to medical debt.
How the No Surprises Act Helps Consumers:
- Prohibits Surprise Billing
- Out-of-network providers cannot charge surprise medical bills for emergency care, scheduled procedures, or other covered services at in-network facilities.
- This prevents unexpected medical costs from turning into unmanageable debt.
- Creates a Medical Bill Dispute Process
- If a consumer receives an unexpected medical bill, they can challenge the charge before it impacts their credit.
- Patients can use an independent dispute resolution process to negotiate their bill with the provider or insurer.
- Prevents Credit Reporting for Disputed Bills
- Medical debt tied to ongoing disputes cannot be reported to credit bureaus until the issue is resolved.
- This protects consumers from erroneous credit score damage caused by insurance mistakes or billing errors.
By limiting unfair medical debt reporting and surprise billing, the No Surprises Act and 2025 medical debt reforms provide better financial protections for individuals facing high healthcare costs. However, consumers must still actively manage medical bills, negotiate payments, and check credit reports for errors to ensure their credit remains in good standing.
3. Removing Medical Debt from Your Credit Report
Medical debt can have a lasting impact on your credit score and financial stability, but recent changes in credit reporting rules make it easier to dispute, negotiate, and remove medical collections from your credit report. Whether the debt is incorrectly reported or accurate but unaffordable, taking the right steps can help protect your credit from long-term damage.
3.1 How to Dispute Medical Debt on Your Credit Report
If a medical collection appears on your credit report and you believe it is inaccurate, outdated, or unfairly reported, you have the legal right to dispute and request its removal. The Fair Credit Reporting Act (FCRA) protects consumers from incorrect credit reporting, giving you the ability to challenge errors.
https://www.youtube.com/watch?v=hTWJxmlgwdU
Steps to Dispute Medical Debt on Your Credit Report
- Get a Copy of Your Credit Report
- Visit com to obtain free copies of your credit report from Experian, Equifax, and TransUnion.
- Review all entries carefully to identify medical collections or errors that could be harming your score.
- Identify Errors
- Look for duplicate medical debts, incorrect balances, or collections that should have been removed under the 2025 medical debt laws.
- Verify whether your insurance should have covered the bill but failed to do so due to billing errors.
- Gather Supporting Documents
- Collect medical bills, Explanation of Benefits (EOBs) from your insurance provider, proof of payments, and correspondence with hospitals or collection agencies.
- If the debt should not have been reported, having written documentation strengthens your dispute.
- File a Dispute with the Credit Bureaus
- Submit a dispute online, by mail, or over the phone to the credit bureau reporting the inaccurate debt.
- Clearly explain why the is incorrect, and attach copies of supporting documents as proof.
- The credit bureaus have 30-45 days to investigate your claim and respond with an outcome.
- Follow Up Until the Issue Is Resolved
- If the dispute is denied, but you believe the is still incorrect, you can escalate the issue by filing a complaint with the Consumer Financial Protection Bureau (CFPB) or seeking legal assistance.
By regularly checking your credit report and disputing errors, you can prevent medical debt from damaging your financial future.
3.2 How to Negotiate Medical Bills with Collections
If the is legitimate but unaffordable, you may be able to negotiate a lower balance, create a payment plan, or remove the collection from your credit report. Many collection agencies and healthcare providers are willing to work with consumers to resolve medical bills.
Steps to Negotiate Medical Debt with Collections
- Contact the Collection Agency or Healthcare Provider
- Reach out to the collection agency, hospital, or healthcare provider to discuss repayment options.
- Be honest about your financial situation and ask about available relief options.
- Request a Pay-for-Delete Agreement
- Some collection agencies may agree to remove the account from your credit report if you settle the debt.
- Negotiate a Settlement or Payment Plan
- If you cannot afford the full amount, ask if the agency will accept a lower lump-sum payment or allow you to pay in installments.
- Be sure to get any agreement in writing before making a payment.
- Check for Financial Assistance Programs
- Many hospitals and nonprofit organizations offer charity care, financial aid, or low-income medical debt forgiveness programs.
- Contact the hospital’s billing department to inquire about eligibility for financial assistance
- After negotiating and making payments, check your credit report.
By disputing errors and negotiating settlements, you can remove medical collections from your credit report and improve your financial standing. If you need professional assistance, credit repair services can help dispute and ensure that your credit report reflects accurate information.
4. Preventing Future Medical Debt Issues
Preventing future medical debt issues is key to maintaining financial stability and protecting your credit score. Understanding your rights when dealing with medical debt collectors and knowing the statute of limitations on can help you avoid unnecessary financial stress.
4.1 How to Stop Medical Debt Collectors from Calling
To protect yourself from harassment, threats, or misleading collection tactics. Many consumers are unaware that they can take immediate action to limit or stop collection calls.
Steps to Stop Medical Debt Collection Calls:
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Send a Cease-and-Desist Letter
- Under the FDCPA, you can send a formal cease-and-desist letter requesting that the collection agency stop contacting you.
- Once the agency receives the letter, they can only contact you to confirm that they will stop collection efforts or inform you of a lawsuit.
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Request Debt Validation
- Before making any payments, ask the collection agency to validate the debt by sending proof that the medical bill is legitimate.
- The Fair Debt Collection Practices Act (FDCPA) gives you the right to dispute the debt within 30 days of the first collection notice.
- If the collection agency cannot provide documentation proving that you owe the debt, they must stop collection efforts and remove the account.
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Know Your Rights Under FTC and CFPB Rules
- The Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB) enforce strict medical debt collection rules, prohibiting deceptive or abusive tactics.
- Collection agencies cannot harass you, threaten legal action they do not intend to take, or misrepresent the amount owed.
- If a debt collector violates these rules, you can file a complaint with the CFPB, FTC, or your state attorney general’s office.
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Negotiate or Settle the Debt If Possible
- If the medical debt is legitimate, consider negotiating a settlement or payment plan to resolve the account before it reaches collections.
- Many healthcare providers offer financial assistance programs, especially for low-income individuals or those facing hardship.
By understanding debt collection laws and exercising your consumer rights, you can prevent aggressive collection tactics from affecting your financial well-being.
4.2 Understanding Medical Debt Statute of Limitations
The statute of limitations on determines how long a creditor or collection agency can legally sue you to collect an unpaid bill. This period varies by state and typically ranges from three to ten years.
How the Statute of Limitations Affects Medical Debt:
- Once the statute of limitations expires, a collector cannot sue you for the debt.
- Making a payment or acknowledging the debt can restart the statute of limitations, resetting the time a collector can sue.
State-Specific Statute of Limitations on Medical Debt
| State | Statute of Limitations |
| California | 4 years |
| Texas | 4 years |
| New York | 6 years |
| Florida | 5 years |
| Illinois | 5 years |
| Pennsylvania | 4 years |
| Ohio | 6 years |
Note: These timelines apply to written contracts, and some states have shorter limits for verbal agreements.
How to Use the Statute of Limitations to Protect Yourself:
- Check your state’s statute of limitations before making payments on old medical debt.
- If a debt is past the legal time limit, you can inform the collector that they cannot legally sue you.
- If a collector files a lawsuit after the statute of limitations expires, you can use the expired limitation as a legal defense in court.
While old medical debt may still appear on credit reports, knowing the statute of limitations prevents collectors from using legal threats to pressure you into unnecessary payments.
5. Credit Repair After Medical Collections
If medical collections have already affected your credit, credit repair services can help by:
- Disputing inaccurate medical debt with credit bureaus.
- Negotiating with creditors to remove negative marks.
- Providing customized strategies to rebuild your credit score.
At Credit-Repair.com, our experts specialize in helping consumers remove medical debt errors from credit reports and improve their financial standing.
Conclusion
However, new legislation enacted in 2025 is simplifying the process of managing by being aware of the reporting requirements for medical debt, challenging errors, and negotiating settlements. You can restore your financial stability and save your credit.
If you need professional help with removing from your credit report, visit Credit-Repair.com for expert assistance.
Frequently Asked Questions (FAQs)
1. Can medical debt still affect my credit score?
Yes, however its impact has diminished due to new laws.
2. How long does medical debt stay on a credit report?
For a maximum of seven years, unpaid medical collections may remain on your record. However, new legislation permits the removal of paid debts.
3. Can I remove medical debt from my credit report?
Yes, you can dispute inaccurate medical debt or negotiate a pay-for-delete agreement with collection agencies.
4. Does paying medical debt improve my credit score?
Yes, particularly since 2025 regulations have eliminated paid medical collections on credit reports.
5. Can hospitals sue for unpaid medical bills?
Yes, but it depends on state laws and the hospital’s collection policies.
7. What should I do if my insurance denied a medical bill?
If your insurance denies a claim, contact your provider to understand the reason. While a file an appeal, and request the hospital or doctor’s office to delay collections.
8. Is it possible to have medical collections deleted from my credit report before the seven-year mark?
You can also contest information that is out-of-date or inaccurate.
9. Are credit bureaus notified of all medical debts?
No one can submit medical invoice totally that is up to 500$. Bills that are a part of plan are consider but are not report.
10. What happens if I ignore medical debt collectors?
Ignoring medical debt collectors does not erase the debt. However, they cannot sue you after the statute of limitations expires. If the debt is legitimate, negotiating a payment plan may prevent further financial harm.