Key takeaways:
Legitimate, unpaid medical debt typically has a 7-year lifespan on a credit report before it falls off.
In 2022, most medical debt was wiped from credit reports and no longer dinged credit scores. After mounting pressure from consumer advocates and lawmakers, the three credit reporting bureaus agreed to drop paid medical debt and wait a year before reporting medical debt.
Starting in 2023, medical debt under $500 will no longer appear on credit reports.
One in every three adults living in the U.S. has unpaid healthcare bills. In fact, medical debt is the nation’s largest source of collections debt — outranking the combined amount owed for credit cards, utilities, and auto loans.
But getting medical debt off credit reports is now easier. Beginning July 1, 2022, the three consumer credit bureaus stopped reporting paid medical debts and agreed to wait 1 year before reporting unpaid medical debt.
Starting in 2023, medical debt that is less than $500 will not be added to credit reports.
Those measures alone will mean that two-thirds of medical debt will not appear on credit reports, according to a Consumer Financial Protection Bureau (CFPB) analysis.
Most other, unpaid medical debt will remain on credit reports for the typical 7 years. But there may be ways to get those negative marks off your credit report sooner.
How do I check my credit report for medical debt?
There are three major consumer credit reporting bureaus: Equifax, Experian, and TransUnion.
Your credit report may differ depending on who is doing the reporting. So the best way to check how medical debt is affecting your credit is to request a copy of all three reports through AnnualCreditReport.com, which is authorized by the U.S. government. Federal law allows you to request a free copy of your credit report from each company every 12 months.
You will be required to verify your identity before you can view, print, or download your reports. In most cases, you can provide verification by answering questions about financial accounts and previous addresses. You can also submit a copy of a government-issued ID.
When you request your reports, you will be offered paid services, such as credit monitoring, by each of the bureaus. But you don’t need to buy anything to receive your reports.
How do I remove medical debt from my credit report?
There are several potential strategies that could remove medical debt from your credit report. Below, we explore seven of them.
1. Dispute an error
If you notice incorrect medical debt listed on your credit reports, you have options. The easiest way to remove inaccurate information is to dispute the error with each of the three credit bureaus.
Review your reports through AnnualCreditReport.com and dispute anything that is incorrect. The CFPB offers sample letters that can help you file a dispute.
2. Pay off your medical debt
You may be surprised by how much money you can save by picking up the phone. Most doctors, hospitals, and collection agencies make payment arrangements. And many healthcare creditors are willing to negotiate debt.
Also, keep in mind that medical providers and facilities often have financial assistance programs that can reduce or wipe away your debt.
3. Bring your medical debt below $500
After January 1, 2023, medical debt that’s less than $500 will be removed automatically from credit reports. Any qualifying debt that is not dropped can be disputed as an error. When medical debt falls off of your credit report, it can increase your credit score.
4. Ask your health insurance company to pay the debt
Sometimes, health insurance companies refuse to pay medical debts. If this has happened to you, make sure you appeal the decision. If you act quickly, you may be able to avoid having the debt sold to a collection agency or listed on your credit report.
5. Ask for a goodwill deletion
Goodwill deletions are uncommon, but they do happen. If you have only one or two late payments, it may be worth it to request a goodwill deletion of that information. You will need to be persistent and polite when you make the request over the phone or in a goodwill letter. Sometimes, the company or creditor will remove the damaging information from your credit reports because you have mostly paid as agreed.
6. Settle your medical debt with pay for delete
If you are able to pay off the balance of a medical debt, you may be able to get it cleared from your credit report with a pay for delete arrangement. Often, this is an agreement in exchange for payment in full. If this seems like an option for you, call the debtor or collection agency handling your debt and ask about having the damaging information removed from your reports.
7. Hire a credit repair company
Credit repair companies are an option for consumers who have old debt that they are unable to pay or make payments on. This is especially true if the last payment was 6 months ago or longer.
If you decide to get help from a credit repair company, be cautious about who you hire. Not all companies achieve results and some are scams. Never work with a company that charges you upfront. Legitimate credit repair companies are required to do the work before they bill you. The CFPB regularly takes action against credit repair operations that mislead consumers and charge illegal fees.
How does the Medical Debt Relief Act affect my medical bills?
The Medical Debt Relief Act of 2021 aimed to help consumers by giving them more time to pay healthcare bills and by keeping most medical debt from appearing on credit reports. While the law was not enacted, its proposed changes regarding medical debt on credit reports and your rights in medical debt collection were implemented voluntarily by the three main credit bureaus.
The bottom line
As of 2022, medical debt doesn’t appear on your credit reports until 1 year after it’s reported to credit bureaus and paid medical debt falls off your credit reports automatically. And, beginning in 2023, medical debt that is less than $500 won’t appear on your credit reports.
Other unpaid medical debt typically doesn’t fall off of your credit report until after 7 years. Luckily, there are several ways to remove medical debt from your credit report, including paying the debt, paying the debt down to less than $500, disputing an error, and asking for a goodwill deletion.
Why trust our experts?
References
Brown, D. (2016). How to avoid credit repair service scams. Consumer Financial Protection Bureau.
Consumer Financial Protection Bureau. (n.d.). Sample letters to dispute information on a credit report.
Consumer Financial Protection Bureau. (2021). How do I dispute an error on my credit report?
Consumer Financial Protection Bureau. (2022). CFPB publishes analysis of potential impacts of medical debt credit reporting changes.
Gerson, E. M. (2021). Goodwill letters: What you need to know. Credit Karma.
Hansen, E. (2021). Can a goodwill letter help my credit score? UpSolve.
The White House. (2022). Fact sheet: The Biden administration announces new actions to lessen the burden of medical debt and increase consumer protection.
Treece, K., et al. (2021). Pay for delete: Learn about this collection removal strategy. Forbes.
