Medical Debt and Your Credit Score: What Changed in 2023

The Landscape Has Changed

In a series of announcements beginning in 2022 and taking effect through 2023, the three major credit bureaus -- Equifax, Experian, and TransUnion -- fundamentally changed how medical debt appears on credit reports. These changes, combined with new CFPB rules, represent the most significant shift in medical debt reporting in decades. If you have medical debt, understanding these changes is essential.

Key Changes to Medical Debt Reporting

Three major changes took effect. First, paid medical debt is no longer included on credit reports. If you had medical collections that were subsequently paid, they should no longer appear on your credit report. Second, unpaid medical debt does not appear on credit reports until at least one year after it is sent to collections, up from the previous six-month window. Third, medical debts under $500 are no longer included on credit reports, regardless of payment status.

The CFPB Final Rule

The Consumer Financial Protection Bureau issued a final rule in 2024 aimed at further removing medical bills from credit reports. This rule, if fully implemented, would prohibit credit reporting companies from including medical debt on credit reports entirely. While implementation timelines may shift, the trajectory is clearly toward eliminating medical debt from credit scoring.

What This Means for You Right Now

If you have medical debt, these changes provide meaningful relief. Paid medical collections should already be removed from your report. Check your credit report through AnnualCreditReport.com and dispute any paid medical collections that still appear. Small medical debts under $500 should not appear on your report. If they do, dispute them. You now have a full year after a bill goes to collections before it can affect your credit, giving you more time to negotiate and resolve bills.

How to Check and Clean Your Credit Report

Request your free credit reports from all three bureaus at AnnualCreditReport.com. Review each report for medical collections. If you find paid medical collections, medical debts under $500, or medical debts reported before the one-year waiting period, file disputes with each bureau. Include documentation showing the debt was paid or falls below the $500 threshold. The bureaus must investigate and respond within 30 days.

Medical Debt That Still Affects Your Credit

Despite the improvements, some medical debt can still impact your credit. Unpaid medical collections over $500 that are more than one year old may still appear. Medical debt placed on a credit card or personal loan is treated as regular consumer debt and is not subject to the medical debt protections. Medical debt included in a court judgment may still appear.

Strategies to Minimize Credit Impact

To protect your credit while dealing with medical bills, negotiate or set up a payment plan before the bill goes to collections. If a bill does go to collections, try to resolve it within the one-year grace period before it can appear on your credit report. Never put medical bills on a credit card, as this converts them to consumer debt that loses the special protections. Always get written confirmation when a bill is paid or settled.

Proactive Steps with BillDelete

The best way to prevent medical debt from affecting your credit is to resolve bills before they reach collections. BillDelete provides the negotiation letters, financial hardship applications, and payment plan proposals you need to resolve medical bills quickly and effectively. Taking action early protects both your wallet and your credit score.