Medical Debt & Your Credit Score:
2026 Rules Explained
Major changes to how medical debt appears on credit reports mean millions of Americans can now improve their credit scores. Here is what changed and what you need to know.
15M+
Medical debt records removed from credit reports since 2022
<$500
Medical debt under this amount is no longer reported
1 Year
Grace period before any medical debt can appear on your report
Timeline of Changes
- Equifax, Experian, and TransUnion announce voluntary changes to medical debt reporting.
- Paid medical debt removed from credit reports.
- Waiting period before unpaid medical debt appears extended from 6 months to 1 year.
- Changes took effect July 1, 2022.
- All medical debt under $500 removed from credit reports.
- Affected an estimated 14.8 million consumers.
- Average credit score increase of 20-25 points for affected consumers.
- CFPB proposes rule to ban ALL medical debt from credit reports.
- Would affect $49 billion in outstanding medical collections.
- Would boost credit scores for approximately 15 million Americans.
- Multiple states pass additional protections (Colorado, California, New York, and others).
- VantageScore 4.0 already excludes most medical collections from scoring.
- Growing bipartisan support for federal medical debt protections.
- CMS price transparency enforcement strengthened with larger penalties.
- More states adding medical debt credit protections.
- CFPB rule awaiting finalization or new rulemaking under current administration.
- Hospital price transparency compliance rates improve, giving consumers more negotiation power.
Current Rules: What Applies Now
What CAN Appear
- Unpaid medical debt over $500
- Only after 365 days from the original billing date
- Only if sent to a third-party collections agency
- Medical debt from any provider type (hospital, doctor, dentist, etc.)
What CANNOT Appear
- Any medical debt under $500
- Paid medical collections (removed within 30-45 days)
- Medical debt less than 1 year old
- Debt still being processed by insurance
- Debt covered by an active payment plan with the provider (dispute if reported in error)
What May Change Soon
- CFPB proposed removing ALL medical debt from credit reports
- If finalized, would affect $49 billion in medical collections
- Several states have already enacted stronger rules than the federal baseline
- Growing industry momentum to exclude medical collections from scoring models
How Medical Debt Affects Your Credit Score
Not all credit scoring models treat medical debt the same way. Here is how the major models handle it.
FICO Score 9 and 10
FICO 9 and 10 significantly reduce the weight of medical collections compared to non-medical collections. Paid medical collections are ignored entirely. Unpaid medical collections still have an impact but less than credit card or loan defaults.
Note: Many lenders still use FICO 8 or earlier, which does NOT give medical debt special treatment. Mortgage lenders are transitioning to FICO 10T and VantageScore 4.0 in 2025-2026.
VantageScore 4.0
VantageScore 4.0 largely ignores paid medical collections and gives significantly less weight to unpaid medical collections. This model is used by many fintech lenders and credit card issuers.
Impact Ranges
Large unpaid medical debt ($5,000+)
Potential credit score drop: 50-100 points (decreases over time, heaviest impact in first 2 years)
Moderate unpaid medical debt ($500-$5,000)
Potential credit score drop: 25-60 points depending on overall credit history
Mortgage lending (FHA)
FHA already excludes medical collections under $2,000 from consideration
VA loans
VA loans exclude medical collections entirely from underwriting decisions
How to Remove Medical Debt from Your Credit Report
Get your free credit reports
Visit AnnualCreditReport.com to get free weekly reports from all three bureaus (Equifax, Experian, TransUnion). This service is available through 2026.
Identify all medical collections
Note the creditor name, account number, amount, and date reported for every medical collection account. Check all three reports since they may differ.
Check if any should already be removed
Under $500? Should already be gone. Already paid? Should be removed within 45 days. Less than 1 year old? Too early to report. If any of these apply and the item is still showing, you have grounds for a dispute.
File disputes for incorrectly reported items
You can dispute online through each bureau's dispute portal or by sending a certified letter. Include documentation such as proof of payment, insurance EOBs, or billing statements showing the correct amount.
Negotiate "pay for delete" if applicable
Offer to pay a portion (typically 30-60% of the balance) in exchange for removal. Since paid collections are now automatically removed, you have strong leverage. Always get the agreement in writing before making payment.
Follow up within 30 days
Credit bureaus have 30 days to investigate disputes under the Fair Credit Reporting Act. Check your reports again after this period to confirm the item was removed or corrected.
Escalate if needed
If the bureau does not resolve your dispute, file a complaint with the CFPB at consumerfinance.gov/complaint. You can also file complaints with your state attorney general's office or consult a consumer rights attorney.
Credit Report Dispute Letter Template
Copy this template and customize the bracketed sections with your information.
[Your Full Name]
[Your Street Address]
[City, State, ZIP Code]
[Date]
[Credit Bureau Name]
[Bureau Address]
Re: Dispute of Medical Collection - Account #[ACCOUNT NUMBER]
Dear Dispute Department,
I am writing to dispute the following medical collection
account that appears on my credit report:
Creditor Name: [COLLECTION AGENCY NAME]
Account Number: [ACCOUNT NUMBER]
Amount Reported: $[AMOUNT]
Date Reported: [DATE]
This item should be removed for the following reason
(select all that apply):
[ ] The debt is under $500 and should not be reported
per the April 2023 credit bureau policy change.
[ ] The debt has been paid in full as of [PAYMENT DATE].
See attached proof of payment. Paid medical
collections must be removed per the July 2022
credit bureau policy.
[ ] The debt is less than 365 days old and was reported
prematurely. The original billing date was
[ORIGINAL DATE].
[ ] The debt is not mine. I do not recognize this
account and request verification.
[ ] The amount is incorrect. The actual amount owed
is $[CORRECT AMOUNT]. See attached documentation.
[ ] The debt was covered by insurance. See attached
Explanation of Benefits (EOB).
Enclosed documentation:
[List what you are attaching - payment receipts, EOB,
billing statements, etc.]
Please investigate this dispute and remove this
inaccurate item within 30 days as required by the
Fair Credit Reporting Act, 15 U.S.C. Section 1681i.
I request that you send me written confirmation of the
results of your investigation.
Sincerely,
[Your Full Name]
[Your Phone Number]
[Your Email Address]Tip: Send dispute letters by certified mail with return receipt requested so you have proof of delivery. Keep copies of everything you send.
State-Specific Credit Protections
These states have enacted additional protections beyond the federal baseline. Check your state for extra rights.
| State | Law / Bill | Key Protections | Year |
|---|---|---|---|
| Colorado | HB 22-1285 | Medical debt cannot appear on credit reports after 3 years. Prohibits interest on medical debt over 3% above federal discount rate. | 2023 |
| California | SB 1061 / AB 1020 | Hospitals must screen patients for charity care before collections. Medical debt cannot be reported during active payment plans. Wage garnishment protections for medical debt. | 2023 |
| New York | Medical Debt Protection Act | Caps interest on medical debt at 2%. Requires hospitals to offer financial assistance before pursuing collections. Enhanced consumer protections against aggressive collectors. | 2024 |
| Connecticut | PA 22-92 | Prohibits hospitals from reporting patients to collections within 180 days. Requires financial assistance screening. Income-based payment plan requirements. | 2023 |
| Oregon | HB 3076 | Requires hospitals to screen for financial assistance before billing. Limits medical debt interest rates. Extended payment plan requirements. | 2023 |
| Washington | SB 5853 | Restricts wage garnishment for medical debt. Requires charity care screening at 300% FPL. Limits collection activities on medical accounts. | 2024 |
| Maryland | HB 694 | Free care required for patients under 200% FPL at nonprofit hospitals. Reduced-cost care up to 500% FPL. Hospital bill limits based on income. | 2023 |
| New Mexico | SB 71 | Limits hospital charges for uninsured patients. Financial assistance requirements. Interest rate caps on medical debt. | 2024 |
| Nevada | SB 307 | Medical debt cannot be sold to third parties within 60 days. Patient notification requirements before collections. Financial screening mandates. | 2023 |
| Illinois | HB 2719 | Prohibits medical debt from appearing on credit reports for certain low-income patients. Charity care screening requirements. Limits on aggressive collection tactics. | 2024 |
| Minnesota | HF 402 | Enhanced financial assistance screening. Limits on extraordinary collection actions (liens, garnishment) for medical debt. Extended payment plan options. | 2024 |
| Massachusetts | Chapter 224 | Sliding scale financial assistance at all hospitals. Debt cannot be referred to collections during active disputes. Attorney General oversight of hospital billing. | 2023 |
This table covers states with the most notable additional protections. Many other states have general consumer protection laws that apply to medical debt. See our State Medical Debt Rights page for a complete 50-state guide.
Frequently Asked Questions
How FairVisitHealth Helps with Medical Debt
Our Debt Reduction Hub gives you the tools to fight unfair medical bills and protect your credit.
Credit Report Dispute Kit
Generate customized dispute letters for each credit bureau based on your specific situation.
Debt Validation Wizard
Verify whether a collector has the legal right to collect and whether the amount is accurate.
Fair Price Comparison
Compare your bill against 50M+ real price points to prove if you were overcharged.
Statute of Limitations Checker
Find out if your medical debt is too old to be legally collected in your state.
Sources
- Consumer Financial Protection Bureau (CFPB) - Medical Debt Rulemaking, September 2024
- Equifax, Experian, TransUnion Joint Announcement - National Consumer Assistance Plan, March 2022
- Fair Credit Reporting Act (FCRA), 15 U.S.C. Section 1681
- CFPB Research Brief: Medical Debt Burden in the United States, 2024
- State legislative records: CO HB 22-1285, CA SB 1061, NY Medical Debt Protection Act, and others cited in table above