How Medical Debt Affects Your Credit Score

For the tens of millions of Americans who are uninsured or underinsured, one of the scariest situations they can find themselves in is a medical emergency. Not just because of the risk to their health, but also because the aftermath could look like tens of thousands or even hundreds of thousands of dollars in medical bills. And if you can’t meet those financial demands, then there’s the worry that it will affect your credit score long-term.

Let’s take a look at medical debt in the U.S., how it can impact your credit, and what you can do about it.

The Medical Debt Situation in the U.S.

Medical debt is, very straightforwardly, any healthcare-related bill that goes unpaid, including costs incurred from:

• Hospital visits
• Surgeries
• Prescriptions
• Ambulance services
• MRIs, CTs, and other diagnostic scans

It is a problem that a lot of Americans face. Using government data, the Kaiser Family Foundation estimates that around 14 million people in the U.S. (6% of all adults) owe over $1,000 in medical debt and about 3 million people owe more than $10,000 in medical debt. In total, KFF estimates people in the U.S. owe at least $220 billion, and the Consumer Financial Protection Bureau found that 58% of accounts in collections are for medical bills.

There has been a push from all sides, from the CFPB to the major credit bureaus, to take steps to mitigate these financial burdens. In January 2022, the federal law called the No Surprises Act instituted new protections for consumers against surprise healthcare bills. As of April of 2023 Equifax, Experian, and TransUnion announced that they removed unpaid medical collections under $500 from consumer credit reports.

And while we continue to work for progress in this area, there are still ways medical bills can be a factor in your credit history.

How Your Credit Score Is Affected by Medical Debt

Like we mentioned above, recent moves by the major credit bureaus have made it so that any medical debt under $500 doesn’t affect your credit. Any bills larger than that, however, can potentially hurt your score, depending on your location, who currently holds the debt, and how old the debt is.

Your State of Residence Matters

As of January 2026, there are fifteen states that have statutes on the books banning medical debt in credit reports, including:

• Prohibiting consumer reporting agencies (CRAs) from inserting medical debts in credit reports
• Prohibiting providers and debt collectors from reporting or furnishing medical debt to CRAs
• Prohibiting creditors from using medical debts in their credit decisions

Those states are: California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Virginia, and Washington.

When Bills Go to Collections

A healthcare provider sends you a medical bill, and you either don’t or can’t pay it for whatever reason. While that healthcare provider still owns that bill, it’s not a factor for your credit score. However, after a while – usually 60 to 120 days past due – that healthcare provider can sell it to a medical collections agency.

Once that happens, medical debt collectors can pursue you for payment, although they’re restricted from getting too aggressive by things like the Fair Debt Collections Practices Act. However, that debt still doesn’t appear on your credit report, and if you pay the bill within 365 days from the date it becomes delinquent, it never will.

The Medical Debt Impact

Let’s say you have that unpaid medical bill that got sent to collections and the 365 days have passed and you still haven’t paid it. That is when your medical debt will start showing up in your credit report, and it can remain on there for seven years after becoming delinquent.

The good news: Once you pay it off, that medical debt is removed.

Better news: Experian reports that new FICO credit scoring models give less weight to unpaid medical collections, and new VantageScore® credit scoring models don't consider unpaid medical collections at all.

What Can You Do About Medical Debt

Obviously, in an ideal scenario, the best option is to pay off those medical bills before they go to collections. For any debt that is already with debt collectors, paying it off will result in it being removed from your credit report and could result in a boost to your score. But this isn’t an ideal world, so what other tools are at your disposal?

Before It Goes to Collections

• Make sure you keep an eye on your own medical bills and insurance statements. Verify the expenditures and dispute any issues or discrepancies.
• Negotiate with your healthcare providers. Discuss the possibility of setting up a payment plan that makes repaying them more manageable.
• Work with a medical billing advocate who can serve as an intermediary between medical providers, insurance companies, and patients to resolve outstanding healthcare costs.

After It Goes to Collections

• There’s still time to dispute costs. Just because a collection agency says you owe it doesn’t make it automatically make it true. If you think this is the case, as soon as the collection contacts you, start gathering documentation and seek legal help.
• Look into potential financial assistance. Depending on your situation, you could qualify for help from Medicaid, charities, and nonprofit organizations.
• Personal loans can still help. If you didn’t take one out beforehand, a short-term loan can still be extremely useful for keeping a bill off your credit report. Make sure to look for a reputable lender who cares about your financial situation.

As overwhelming as it can be to be faced with potential medical bills and the financial strain they can cause, it’s not an impossible situation. You can navigate it without having it impact your credit score, and it starts here, with a better understanding of how it all works.