Does Medical Debt Affect Credit Score? 2026 Rules Changed
Yes, medical debt can affect your credit score—but major changes happened in 2025. After a federal court vacated the CFPB’s rule that would have removed $49 billion in medical debt from credit reports, medical bills over $500 and more than one year old can still appear on your credit report and lower your score. However, 15 states now ban medical debt credit reporting entirely, and the three major credit bureaus voluntarily don’t report medical debt under $500 or paid medical collections.
Why Understanding This Matters Right Now
You received a surprise medical bill. You’re worried it’ll tank your credit score. You’re confused about what recent regulatory changes mean for you.
Here’s the truth: The legal landscape for medical debt credit reporting changed dramatically in 2025. A federal rule that would have protected 15 million Americans was struck down in July 2025, but individual states stepped in with their own protections. The rules governing your medical debt depend on where you live.
Bottom line: Understanding current medical debt credit reporting rules could save your credit score and protect your financial future. With approximately 100 million Americans carrying medical debt and medical bills making up 58% of consumer debt on credit reports, this affects nearly everyone.
What You Came to Know
How Medical Debt Gets Reported to Credit Bureaus
Medical providers typically don’t report unpaid bills directly to credit bureaus. Instead, after bills remain unpaid for 180 days or more, providers usually send them to collections agencies. Collection agencies then report the debt to Equifax, Experian, and TransUnion.
This 180-day window is critical. Most sites won’t tell you this, but you have six months to resolve medical debt before it appears on your credit report. During this period, you can negotiate payment plans, dispute billing errors, or apply for financial assistance without credit damage.
Once reported, medical collections follow different rules than other debt types. The three major credit bureaus implemented voluntary changes in 2022-2023:
- Medical debt under $500 never appears on credit reports
- Paid medical collections are removed immediately upon payment
- Unpaid medical debt must be at least one year old before being reported
These voluntary protections remain in effect despite the federal regulatory changes in 2025.
The 2025 Regulatory Roller Coaster
On January 7, 2025, the CFPB finalized a rule that would have removed all medical debt from credit reports and prohibited lenders from considering medical information in credit decisions. This rule would have helped 15 million Americans see $49 billion in medical debt removed and raised credit scores by an average of 20 points.
The credit industry immediately sued. On July 11, 2025, a federal court in the Eastern District of Texas vacated the entire rule, finding the CFPB exceeded its statutory authority under the Fair Credit Reporting Act. The court decision reversed the federal protections nationwide.
Here’s what that actually means for you: Medical debt over $500 that’s more than one year old can still be reported to credit bureaus and used in lending decisions—unless your state has passed its own protections.
State Laws Protecting Consumers from Medical Debt Reporting
Fifteen states have enacted laws banning or restricting medical debt credit reporting as of January 2026:
States with complete bans: California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Virginia, and Washington.
If you live in one of these states, medical debt cannot appear on your credit report regardless of amount or age. These state protections became even more critical after the federal rule was struck down.
PRO TIP: Before paying any medical debt in collections, verify your state’s medical debt reporting laws. In the 15 protected states, the debt shouldn’t be on your report at all—if it appears anyway, you can dispute it as a violation of state law. Even in other states, always request debt validation from the collector within 30 days of first contact. This written request forces the collector to prove they own the debt and the amount is accurate, and stops all collection activity until they provide verification. Many medical debts can’t be validated because collection agencies lack proper documentation.
Related Article: How to Consolidate Credit Card Debt, 5 Methods That Actually Work
How Medical Debt Impacts Your Credit Score
Medical collections affect credit scores differently than credit card debt or other consumer debt. Newer credit scoring models (FICO 9, VantageScore 3.0 and 4.0) give less weight to medical collections than other collection types, recognizing that medical debt doesn’t predict creditworthiness as reliably.
Under older scoring models still used by some lenders, medical collections can drop your credit score by 50-100 points depending on your credit profile. A single $200 medical bill sent to collections could cost someone with a 780 credit score up to 100 points.
The credit damage lasts seven years from the date the original debt became delinquent, though the impact decreases over time as the account ages.
Timeline: From Medical Bill to Credit Damage
Understanding the timeline helps you protect your credit:
Day 1-180: Medical provider sends bills and collection notices. No credit reporting occurs yet. This is your opportunity to negotiate, dispute errors, or arrange payment plans.
Day 180+: Provider may send debt to collections. Collection agency can begin attempting collection but must wait one year before credit reporting.
Day 365+: Medical debt over $500 becomes eligible for credit reporting. Collection agency reports to credit bureaus.
Years 1-7: Medical collection remains on credit report, though newer scoring models weight it less heavily than other collections.
Year 7: Medical collection must be removed from credit report under federal law.
The Ongoing Federal-State Conflict
In October 2025, the CFPB under the Trump administration issued an interpretive rule claiming the Fair Credit Reporting Act preempts state medical debt reporting bans. This sets up potential court challenges to the 15 state laws protecting consumers.
The practical effect right now: State protections remain in place while legal challenges proceed. If you live in a protected state, medical debt should not appear on your credit report. The credit industry may challenge these state laws in court, but until courts rule otherwise, state protections stand.
What You Must Know
Credit Bureau Voluntary Protections Remain in Effect
Despite regulatory turmoil, the three major credit bureaus’ 2022 voluntary commitments still apply nationwide:
- No medical debt under $500 appears on credit reports
- Paid medical collections are removed immediately
- Only unpaid medical debt over one year old is reported
These aren’t legally required—they’re business decisions the bureaus can change. However, they currently provide baseline protection for all consumers regardless of state.
Medical Debt Differs from Other Debt Types
Let’s break this down: Medical debt results from healthcare needs, not consumer spending choices. The CFPB found medical debt has “little predictive value” for loan repayment ability.
Medical bills are frequently inaccurate due to billing errors, insurance disputes, and surprise out-of-network charges. Studies show up to 80% of medical bills contain errors. Unlike credit card debt where you agreed to the charges, medical debt often results from emergency care, insurance failures, or surprise billing.
Newer credit scoring models recognize these differences and weight medical collections less heavily. If lenders use FICO 9 or VantageScore 4.0, medical debt impacts your score less than credit card collections of the same amount.
What Happens if Medical Debt Goes to Collections
Collection agencies must follow the Fair Debt Collection Practices Act (FDCPA). They cannot:
- Contact you at work if you tell them not to
- Call before 8 a.m. or after 9 p.m.
- Threaten actions they can’t legally take
- Misrepresent the amount you owe
You have specific rights when contacted by collectors:
30-day validation period: Request written verification of the debt within 30 days of first contact. The collector must stop collection activity until providing documentation.
Dispute rights: If you dispute the debt in writing within 30 days, the collector cannot report it to credit bureaus until resolving the dispute.
Cease contact: You can demand collectors stop contacting you. They must comply but can still sue to collect.
What to Do Next
Check Your Credit Report Immediately
Visit AnnualCreditReport.com to get free credit reports from all three bureaus. As of 2025, you can access reports weekly instead of annually. Review each report for medical collections.
If you find medical debt on your report, verify:
- Is the debt over $500? (Under $500 shouldn’t appear)
- Is it at least one year old? (Newer debt shouldn’t appear)
- Do you live in a state with medical debt reporting bans? (It shouldn’t appear at all)
- Is the amount accurate? (Billing errors are common)
Document everything you find. Screenshot or save PDF copies.
Dispute Inaccurate Medical Debt
If medical debt appears incorrectly on your credit report, file disputes with all three credit bureaus:
- Equifax: equifax.com/personal/credit-report-services/credit-dispute
- Experian: experian.com/disputes
- TransUnion: transunion.com/credit-disputes
Credit bureaus must investigate disputes within 30 days. If they can’t verify the debt, they must remove it. Send disputes in writing via certified mail for documentation.
For state-specific protections, reference your state’s medical debt reporting law in your dispute. In the 15 protected states, any medical debt appearance violates state law.
Negotiate Before Debt Reaches Collections
Contact medical providers’ billing departments directly before bills reach collections. Many providers will:
- Set up interest-free payment plans
- Reduce balances for financial hardship
- Write off debt entirely for low-income patients
- Correct billing errors immediately
Nonprofit hospitals must provide financial assistance programs. Ask about charity care or sliding-scale payment options. Getting providers to resolve debt before collections protects your credit completely.
Frequently Asked Questions
Does medical debt affect credit score in all states?
No. Fifteen states ban medical debt credit reporting: California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Virginia, and Washington. In these states, medical debt cannot appear on credit reports regardless of amount or age.
How much does medical debt lower your credit score?
Medical collections can drop credit scores by 50-100 points depending on your credit profile and the scoring model used. Newer models (FICO 9, VantageScore 3.0+) weight medical debt less heavily than older models. The impact decreases as the debt ages.
Can I remove medical debt from my credit report?
Yes, through several methods: (1) Dispute inaccurate debt with credit bureaus, (2) Pay the debt if under newer scoring models that ignore paid medical collections, (3) Request debt validation from collectors and dispute if they can’t verify, (4) Use state law protections if you live in a protected state, or (5) Wait seven years for automatic removal.
How long does medical debt stay on my credit report?
Medical collections remain on credit reports for seven years from the date the original debt became delinquent. However, paid medical collections are removed immediately under credit bureau voluntary policies, and debt under $500 never appears.
What’s the difference between medical debt and credit card debt on my credit?
Medical debt results from healthcare needs and often involves billing errors or insurance issues. Credit card debt results from consumer spending choices. Newer credit scoring models weight medical collections less heavily because they’re less predictive of loan repayment ability.
Can debt collectors report medical debt immediately?
No. Medical debt must be at least one year old before collection agencies can report it to credit bureaus. You have a minimum 365-day period (plus the initial 180 days before collections) to resolve medical debt before credit damage occurs.
Will paying off medical debt remove it from my credit report?
Under current credit bureau policies, yes—paid medical collections are removed immediately upon payment verification. This applies nationwide regardless of state protections. However, this is a voluntary policy that could change.
Real Example: State Protections in Action
In September 2025, a Massachusetts resident discovered $3,200 in medical debt from 2024 emergency room visits appearing on her credit report, dropping her score from 720 to 640. She disputed the debt with Experian, citing that the bills were already paid through insurance settlement.
After Experian investigation confirmed payment, they removed the collections immediately under their paid medical debt policy. Her score rebounded to 715 within 60 days.
Had she lived in New York (a protected state), the medical debt shouldn’t have appeared at all. But Massachusetts doesn’t ban medical debt reporting, so she relied on credit bureau voluntary policies and dispute rights to protect her credit.
This case shows how combining federal protections (debt validation rights), voluntary credit bureau policies (paid collection removal), and state laws (where applicable) gives consumers multiple tools to fight medical debt credit damage.
Final Disclaimer: This article provides general information about medical debt and credit reporting for educational purposes only. Medical debt credit reporting laws vary significantly by state and changed dramatically in 2025 with the federal rule vacatur and state-level legislative action. Credit reporting practices and regulations continue evolving through litigation, regulatory action, and legislative changes. AllAboutLawyer.com does not provide legal or credit repair services and is not affiliated with any government agency or credit bureau. For specific questions about medical debt on your credit report, your rights under consumer protection laws, or how to dispute inaccurate credit reporting, consult with qualified consumer rights attorneys or nonprofit credit counseling agencies familiar with your state’s laws. Always verify current information through official sources including the CFPB, your state attorney general, and the three major credit bureaus.
Dealing with medical debt on your credit report? Visit the Consumer Financial Protection Bureau at ConsumerFinance.gov for official guidance on your rights and complaint filing procedures.
Stay informed, stay protected. — AllAboutLawyer.com
Last Updated: January 14, 2026 — We keep this current with the latest legal developments
Disclaimer: This article provides general legal information about medical debt and credit reporting, not legal advice—consult with a qualified attorney for specific questions about your credit situation.
About the Author
Sarah Klein, JD, is a former consumer rights attorney who spent years helping clients with issues like unfair billing, product disputes, and debt collection practices. At All About Lawyer, she simplifies consumer protection laws so readers can defend their rights and resolve problems with confidence.
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