Many Americans Are Watching Medical Debt Drop Off Their Credit Report | Here’s What To Expect and How to Check Yours

By Mitch Rice

Medical debt negatively affects credit scores for millions of Americans. One in five people says that they could not pay their bills when they received medical care. People under age 30 report higher unpaid medical bills than seniors. Until now, even paid medical debt can remain on reports, dinging your credit score for up to seven years.

Now, starting in 2023, three main credit bureaus, Experian, TransUnion, and Equifax won’t report medical debt under $500 that has gone to collections. As of July 1, 2022, credit agencies will erase even more types of medical debt from credit reports.

Discover which kinds of medical debt are falling off credit scores this year and how you can check if your medical debt qualifies.

1.    Paid Medical Debt Will Disappear from Credit Reports

According to Forbes, about 58% of the bills showing up on consumers’ credit reports in June 2021 were related to medical bills. For example, a $25 medical bill for an unpaid co-pay could ding your credit score.

The credit agencies say their new policies will eliminate roughly 70% of medical debt from credit reports.

Now, according to CNBC, people could see almost 70% of medical debt erased from their credit reports. That’s because the 3 nationwide credit reporting agencies decided, after researching their industry for months, to change how and if they report the medical debt that makes up a mountain of debt owed to lenders and collection agencies.

Since medical bills aren’t racked up for fun and usually come from unforeseen medical events, these agencies are taking a big step to help Americans, especially those among racial and ethnic groups, to achieve better personal and financial well-being.

2.    New Medical Debt in Collections Won’t Show Up for a Year

Anyone who has had unpaid medical debt knows that getting sent to collections can put a serious dent in your credit score. Even worse, this ding snowballs over time. The longer you don’t pay your bill, the worse your credit score drops.

For example, you might see your credit score drop more if you didn’t pay a bill for 150 days rather than one that you’ve only owed for a month.

That’s why the new rule change means that credit bureaus won’t include any hospital bills sent to collections until a year has passed.

This can give people some extra time to pay off medical bills before the debt hurts their credit score. On the plus side, if you already paid off what you owe, you should see your credit scores increase soon.

For people who only had one debt in collections, Credit Glo, a credit repair company, advises that removing this debt from the report could make their credit scores jump by as much as 150 points. Keep in mind that if you have multiple accounts in collections, it could take much longer to see any positive changes in your score.

3.    Credit Reports Won’t Include Medical Debt Under $500

Starting in 2023, if you owe a medical bill that’s less than $500, it won’t even show up on your credit report.

According to industry research, most people in the US who get behind on medical debt are faced with multiple bills that fall below $500 each.

By raising the reporting threshold to medical debt over $500, the credit reporting agencies are giving many Americans a significant gift.

Even though these smaller medical bills add up, this change means that you don’t need to worry about that dental bill or routine doctor’s visit damaging your credit score or preventing you from securing a favorable house mortgage or auto loan if your debt falls below $500.

Here’s How to Check If Your Medical Debt Shows on Your Credit Report

If you want to check your medical debt eligibility this year, you can head over to to snag a free copy of your credit report from the three major credit bureaus, Equifax, TransUnion, and Experian.

Even better, you no longer get just one free report per year. Now you can check your report online for free every week through December 2022. Here’s what to do:

  • If you paid off any medical debt in full, that’s the debt that you’ll want to check first, since this is the debt that’s most likely to vanish with the new medical debt rule change.
  • Once you obtain your free credit report, look at the section where new debt is flagged. If you don’t see any, you can also check the “collections” category and “account information” areas in the report.
  • After reviewing your report, if you find any debt that you already paid or any other debt that is reported in error, reach out to the credit reporting agency directly to dispute the mistake. Since each credit report might focus on different information, it’s a good idea to review reports from all three major credit firms.

Since credit bureaus are required by Federal law to examine a dispute within 30 days after submission (there are some exceptions), you can also expect a response in 5 days after the bureau completes the investigation.

On the off chance that the agency denies your claim or doesn’t remove the mistake from your credit report, you can take the next step by submitting a complaint to the Consumer Financial Protection Bureau.

Final Thoughts

Lots of Americans are going to see millions in collective medical debt erased from their credit reports. If you owe less than $500 from medical care, this will no longer ding your score until you pay it off. Even better, if your unpaid debt went to a collection agency, it won’t affect your credit report for a year.

If you’ve experienced paid medical debt lingering on your credit report for years, now is your chance to see that disappear.

This means that millions of Americans could see their credit scores improve starting this month.

Data and information are provided for informational purposes only, and are not intended for investment, medical or other purposes.