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It takes seven years for medical debt to disappear from your credit report. And even then, the debt never actually goes away.
If you've had a recent hospital stay or an unpleasant visit to your doctor, worrying about thecredit bureaus is likely the last thing you want to do. But when faced with the choice between charging medical bills onto your credit card or letting them go unpaid, it's important to know what happens to medical debt if you don't pay it off immediately.
Below, CNBC Select gets advice from financial educator Thomas Nitzsche, of Money Management International, Inc (a 501(c)(3) nonprofit member of the National Foundation for Credit Counseling) about how long medical debt stays on your credit report and its effect on your credit score.
How long does medical debt stay on your credit report?
Once reported to your credit bureau, medical debt remains on your credit report for seven years, which is as long as any other collection debt.
Medical debt is not reported to your credit as long as it remains with your original service provider, but the moment it goes to collections, you'll likely see a ding on your score. Before that happens, you should ask a billing representative at your medical provider's office about financial aid and/or repayment plans to prevent any negligence from showing up on your credit.
"Once it goes to a collection agency (usually about 3 months past due), the credit bureaus must wait another 180 days before reporting it as past due," Nitzsche says. "This is a somewhat recent adjustment made to the rules due to the fact that sometimes it takes an extended period of time for insurance issues to be worked out."
If this is the case, check your credit report regularly (and for free) to help spot fraud and to ensure that the correct information is being reported to the credit bureaus. (About 25% of Americans have an error on their credit reports.)
Can't I just pay off my medical bills with a credit card?
Before choosing to use a credit card to pay your medical bill, make sure you have a plan for repaying the debt after it's charged. The last thing you want to do is add to the pain of medical debt by racking up interest on a credit card.
And if you are struggling with how to pay off your medical debt, consider moving it to a 0% balance transfer credit card. The Chase Slate® Credit Card offers a low introductory balance transfer offer: $0 fee during the first 60 days of account opening and 0% intro APR for the first 15 months from account opening (then 14.99% to 23.74% variable APR).
How does medical debt affect my credit score?
The short answer is that it depends.
"Most scoring models minimize the negative impact of medical debt versus other types of debt, but the problem is that you never know which scoring model a lender will use," Nitzsche says. "The best scenario is to keep it from ever reporting to the bureaus in the first place."
If it's too late and you've already overlooked a medical bill, it might go unnoticed depending on how large it was.Latest FICO and VantageScore credit scoring models give less weight to unpaid medical collections than to other types of collection accounts, such as credit card and student loan debt. And the most recent FICO scores also ignore collection accounts that have an original unpaid balance less than $100.
While medical debt remains on your credit report for seven years, the three major credit scoring agencies (Experian, Equifax and TransUnion) will remove it from your credit history once paid off by an insurer. Remember that a credit report is an aggregation of your credit history, including detailed information such as your credit accounts, your payment history and your outstanding balances. The information from your credit report is summed up in your 3-digit credit score.
But still, with the many options there are to resolve medical debt, it's probably less scary to confront it than you think.
"In general, there are more options to prevent and resolve medical debt than other types of debt," Nitzsche says. "This can include financial aid from the service provider in a hardship situation, or settling with the collection agency prior to it negatively impacting your credit."
The bottom line? It's always best to ask.
Information about the Chase Slate® Credit Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the cards prior to publication.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
FAQs
Unpaid medical debt that is in collections can be reported to credit bureaus after one year. At that point, it remains on your credit report for seven years, the same as any other kind of debt. As of 2023, medical debt can only impact your credit score if it's over $500.
What is the new rule for medical collections on credit reports? ›
Following the release of a CFPB report in March 2022 that found that Americans owed $88 billion in unpaid medical bills, the three largest credit reporting agencies announced that they would no longer include paid medical debts, unpaid medical debts less than a year old, and medical debt under $500 from credit ...
How to get medical debt removed from credit report? ›
How to get medical bills off credit reports
- Gather evidence. Collect as much documentation as you can to prove the bill was paid. ...
- File your dispute with any credit bureau that's reporting the error. Make sure to check your credit reports from all the three bureaus. ...
- Keep communicating.
Judgments stay either seven years or until the statute of limitations in your state is up, whichever is longer. And here's one more caveat: While unpaid medical bills will come off your credit report after seven years, you may still be legally responsible for them depending on the statute of limitations.
What happens after 7 years of not paying debt? ›
In general, most debt will fall off of your credit report after seven years, but some types of debt can stay for up to 10 years or even indefinitely. Certain types of debt or derogatory marks, such as tax liens and paid medical debt collections, will not typically show up on your credit report.
Do medical bills affect your credit score in 2024? ›
While unpaid medical debt doesn't have the same impact on your credit score as an unpaid credit card bill, it can impact your credit nonetheless. And while your credit score may not suffer as heavily, lenders can still see your outstanding debts on your credit report.
Is it true that all medical collections are $500 will automatically be removed from my credit report? ›
Unpaid medical collection accounts over $500 can remain on your credit report for seven years after they become delinquent; however once they are paid, they will be removed from your report.
What is the FCRA law for medical debt? ›
The Fair Credit Reporting Act (FCRA) and the Health Insurance Portability and Accountability Act (HIPAA) generally allow furnishers to report medical debts to consumer reporting agencies, though some restrictions apply.
Will medical debt collectors settle for less? ›
For medical debt, it is common to negotiate to a lower amount than you were originally billed. For medical debt, creditors will typically settle for roughly the amount insurance companies pay for the same services, which is usually much lower than the amount that would be billed to an uninsured person.
What to say to dispute medical collection? ›
I am aware that there is a debt from [name of hospital/doctor], but I am unaware of the amount due and your bill does not include a breakdown of any fees. Additionally, I am allowed under the Health Insurance Portability and Accountability Act (HIPAA) to protect my privacy and medical records from third parties.
To Whom It May Concern: I am writing to negotiate the above medical bills because I am unable to pay the amount requested. Pursuing me for these bills will force me (and my family) into further financial hardship. This is where you explain your current financial situation and why you are unable to pay.
What happens when medical debt goes to collections? ›
Once medical bills enter collections, they are often reported to consumer credit reporting companies. Medical debt collections on a credit report can impact your ability to buy or rent a home, raise the price you pay for a car or insurance, and make it more difficult to find a job.
Do medical bills fall off after 7 years? ›
It takes seven years for medical debt to disappear from your credit report. And even then, the debt never actually goes away. If you've had a recent hospital stay or an unpleasant visit to your doctor, worrying about the credit bureaus is likely the last thing you want to do.
What is the CFPB proposed rule for medical debt? ›
WASHINGTON, D.C. - The Consumer Financial Protection Bureau (CFPB) today proposed a rule that would remove medical bills from most credit reports, increase privacy protections, help to increase credit scores and loan approvals, and prevent debt collectors from using the credit reporting system to coerce people to pay.
What is a letter for medical debt forgiveness? ›
A hardship letter is a formal letter that you write to your healthcare provider or insurance company to request assistance or a payment plan. The letter should explain your situation, provide evidence of your financial hardship, and explain why you are unable to pay your medical bills.
How long until a medical bill goes to collections? ›
Medical bills are the number one reason people file for bankruptcy. But you may not have to make that tough decision if you are able to manage your debt collectors. Bills will typically get forwarded to a collector anywhere between 90 to 120 days after billing.
How many points do medical bills affect your credit? ›
Most healthcare providers do not report to the three nationwide credit bureaus (Equifax, Experian and TransUnion), which means most medical debt billed directly by physicians, hospitals or other healthcare providers is not typically included on credit reports and does not generally factor into credit scores.
Can medical bills under $500 go to collections? ›
As of April 2023, medical debt under $500 in collections and any medical debt that's been paid off no longer appears on consumers credit reports. Likewise, medical debt over $500 is not reported to the credit bureaus until a year after going to collections.
