Medical bills are one of the leading causes of financial stress in the United States. For years, unpaid medical debt could haunt your credit report and lower your credit score—even if the amount was small or eventually paid off. But as of 2025, major changes have transformed how medical debt impacts your credit—and that’s good news for millions of Americans.
Whether you’ve received a surprise bill, are negotiating payment with a provider, or want to protect your credit after a health crisis, this guide breaks down everything you need to know about medical debt and your credit score today.
Why Medical Debt Is Different from Other Debt
Unlike credit cards or personal loans, medical debt is usually involuntary. You didn’t choose to break your arm or need surgery. And even with insurance, you may be hit with unexpected bills due to:
High deductibles and coinsurance
Out-of-network providers
Billing errors
Denied insurance claims
Because of this, medical debt is often more complex and unpredictable than traditional debt—and advocates have long pushed for credit scoring models to treat it differently.
The Big Shift: 2022–2025 Medical Debt Reform
Between 2022 and 2023, the three major credit bureaus—Equifax, Experian, and TransUnion—announced sweeping changes to how they report medical debt:
July 2022: Paid medical debt is no longer included on credit reports.
April 2023: Unpaid medical debt under $500 is no longer reported.
As of 2023: Consumers have one year before unpaid medical debt appears on their credit report (previously it was six months).
These changes are the result of pressure from consumer advocates, research by the Consumer Financial Protection Bureau (CFPB), and a growing recognition that medical debt is not a reliable indicator of creditworthiness.
The result? Millions of people have seen medical collections disappear from their credit reports, helping boost credit scores and reduce barriers to housing, loans, and employment.
What’s Still Allowed in 2025
While the major credit bureaus have stopped reporting smaller and paid medical collections, larger, unpaid medical debts over $500 can still appear on your report—if they remain unresolved for more than 12 months.
This means:
You have a full year from the date of the first delinquency to resolve the debt before it’s reported.
After that, it could stay on your credit report for up to seven years.
Also, lenders using older scoring models (like FICO 8) may still factor in medical debt, even if newer models (like VantageScore 4.0 or FICO 9/10) are more lenient.
How Medical Debt Affects Your Credit Score
When medical debt does appear on your credit report, it can lower your score—especially if:
It’s sent to collections and remains unpaid
You already have other forms of debt
Your credit history is short or limited
However, newer credit models weigh medical debt less heavily than other types of collections. And because paid medical collections no longer appear, paying off debt can improve your score faster than before.
According to the CFPB, removing medical collections can improve credit scores by up to 25 points or more, depending on the person’s financial profile.
How to Prevent Medical Debt from Hurting Your Credit
1. Check Your Bills Carefully
Medical billing is notoriously error-prone. Always request an itemized bill, review charges, and compare them to your Explanation of Benefits (EOB) from your insurer. Look for:
Duplicate charges
Services you didn’t receive
Incorrect insurance adjustments
If something doesn’t add up, call the provider’s billing department to dispute the charges.
2. Negotiate or Set Up a Payment Plan
Most hospitals and clinics offer interest-free payment plans—but you need to ask. Some may offer discounts for prompt payment or for uninsured patients.
If you can’t afford the full amount, ask about:
Sliding scale fees
Financial assistance programs (especially at nonprofit hospitals)
Debt forgiveness options
3. Communicate Early and Often
Don’t wait until a bill is in collections. As soon as you receive a bill you can’t pay in full, contact the provider. Once a bill goes to collections, it becomes harder to negotiate.
4. Monitor Your Credit
Regularly check your credit reports from all three bureaus at AnnualCreditReport.com. As of 2025, reports are free weekly.
If you see medical debt that shouldn’t be there—especially if it’s under $500 or already paid—you can file a dispute online with each credit bureau.
What to Do If Medical Debt Is Already in Collections
If your debt has gone to collections and shows up on your credit report:
Verify the debt: Make sure it’s accurate and actually yours. Debt collectors must provide documentation within 30 days if you request it.
Negotiate a settlement: Ask the collector to accept a lower lump-sum payment or a payment plan. In writing, request a “pay for delete” agreement—where they remove the account from your credit report once paid.
Check your state’s laws: Some states have additional consumer protections, including limits on how medical debt can be collected or reported.
The Role of the No Surprises Act
The No Surprises Act, which took effect in 2022, also helps prevent unexpected medical bills—particularly from out-of-network providers at in-network hospitals or emergency situations.
This law prohibits balance billing in many situations, meaning providers can’t charge you the difference between what they bill and what insurance pays.
If you think you were wrongly billed or overcharged, contact the No Surprises Help Desk: https://www.cms.gov/nosurprises
Medical Credit Cards and Buy Now, Pay Later Plans: Beware
Some providers offer medical credit cards or partner with “buy now, pay later” (BNPL) services to help patients finance large bills. While convenient, these tools come with risks:
High interest rates after promotional periods
Potential late fees
BNPL accounts may not be subject to the same dispute protections as traditional credit cards
Use these options only if you understand the terms and have no better alternatives.
Bottom Line
Medical debt can be overwhelming—but as of 2025, it’s less likely than ever to damage your credit. Thanks to changes by the major credit bureaus and new consumer protections, you have more time and options to resolve bills before they appear on your report.
Still, unpaid medical debt over $500 can have consequences—so stay proactive, communicate with providers, and review your credit reports regularly. Your health should never come at the cost of your financial future.
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