Unpaid medical bills take longer to hit your credit report and are weighed less heavily in some scores, but they can affect your credit.
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🤓Nerdy Tip
Big changes are coming to how medical debt is reported by the three major U.S. credit bureaus. Starting July 1, 2022: Consumers can expect to have paid medical debt erased from their credit reports, and the delay before unpaid medical debt appears on credit reports will jump from six months to one year. Starting Jan. 1, 2023: All unpaid medical debt less than $500 will not appear on credit reports.
In August 2022, VantageScore announced all paid and unpaid medical debt — regardless of how much is owed or how long the debt has been in collections — will be excluded from 3.0 or 4.0 score calculations by mid-October 2022.
A serious illness or injury can be disruptive. You need to heal, and you may be overwhelmed for a while as you put your work and family life back together.
There’s a strong chance your finances will be affected, too, if an unpaid medical bill makes its way to your credit reports. (Read more about your options for paying medical bills).
Even smaller medical bills can strain finances, too. Here’s how medical bills affect your credit and how to deal with the fallout if you end up in collections when a bill goes unpaid.
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Do medical bills affect your credit?
Medical bills are most likely to affect your credit if they go unpaid for many months and get turned over to collections.
Medical providers don’t always report payment information to the three major credit bureaus. As of July 1, 2022, there is a year-long waiting period before unpaid medical debt can appear on your credit reports.
Also beginning in July 2022, the credit bureaus states will remove all paid medical debt from credit reports. Check your reports after that cutoff to make sure that your paid medical debt no longer appears.
But if you don’t pay a bill, eventually your medical provider may turn the debt over to a collections agency. At this point, your unpaid bill probably is showing up on your credit reports as having gone to collections.
This is where things get messy, because the information on your credit reports is used to create your credit scores. Failure to pay a bill affects the biggest factor determining your credit scores: payment history. Consequently, having a medical bill in collections can result in serious damage to your credit scores.
Frequently asked questions
- Do medical bills go away after seven years?
- How can I get medical bills off my credit report?
- Do medical bills affect your credit when buying a house?
- Can I get medical bills off of my credit reports?
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This article was originally published on Nerdwallet on August 12, 2020.
