How Does Medical Debt Impact Your Credit Score?

Learn How Medical Debt Impacts Your Credit Score.

Unpaid medical bills are written off by doctors, hospitals and other healthcare providers and sent to collections agencies.

Collections agencies then report the debt to the big three Credit Bureaus: TransUnion, Equifax and Experian. The Credit Bureaus then send that data to the two credit scoring companies: FICO and VantageScore.

The problem with this process is that 80% of medical bills are incorrect, so the debt and its impact on a person's credit score is incorrect as well.

Medical Debt can frequently decrease a credit score by 50-110 points

The Federal Government has tried to decrease this impact of medical debt on credit scores by pressuring the Credit Bureaus to no longer record medical debt of less than $500.

This change occurred in 2023 and resulted in the percent of Americans with medical debt on their credit rating decreasing from 14% to 5%.

VantageScore even voluntarily stopped counting ALL medical debt when calculating a person's credit score.

However, FICO--which is used by by 90% of lenders--still counts medical debt greater than $500 against a person's credit score.

The Consumer Financial Protection Bureau is trying to ban all medial debt from being used in a person's credit score, but as of August 2025, no official regulatory change has occurred.

Update as of 2/25/25: President Biden banned all medical debt from being included in credit reports. However, President Trump has paused the ban and is moving to shut down the Consumer Financial Protection Bureau that created the ban, leaving the future of the ban in question.
Source: https://www.usatoday.com/story/money/...

Sources:
https://www.cnbc.com/select/medical-d...

https://www.consumerfinance.gov/about...

https://files.consumerfinance.gov/f/d...

https://www.capitalone.com/learn-grow...

https://www.forbes.com/advisor/credit...

https://www.nbcchicago.com/consumer/u....

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