Medical Debt and Your Credit Report (2026)
The bureaus' own policy changes removed about 70% of medical collections from credit reports. Here's what's still reported and how to handle it.
Medical debt used to devastate credit scores. That changed dramatically in 2022-2023.
The three major credit bureaus (Equifax, Experian, TransUnion) voluntarily removed most medical debt from credit reports. Here's what the rules are now and what to do if you still see medical debt on your report.
Current Rules (2026)
The three bureaus follow these voluntary policies, adopted in 2022–2023:
✓ Medical Debt Rules
- Paid medical debt — Removed from credit reports entirely
- Unpaid medical debt under $500 — Not reported at all
- New medical debt — 12-month waiting period before it can be reported (time for insurance, billing disputes, payment plans)
- Unpaid medical debt $500+ — Can be reported after 12 months
These changes removed about 70% of medical collection tradelines from consumer credit reports, clearing it for roughly half of the 43 million people who had it.
The Federal Regulation (and Court Challenge)
In January 2025, the CFPB finalized a rule to ban all medical debt from credit reports entirely. However, in July 2025, a federal court in Texas vacated this rule, finding the CFPB exceeded its authority.
The current situation:
- Federal ban: Struck down by a Texas federal court in July 2025. No federal ban exists now.
- Bureau voluntary policies: Still in effect (paid debt removed, $500 threshold, 12-month delay)
- State laws: About 15 states plus DC have their own limits, but federal regulators are challenging them (see below)
State Protections
About 15 states plus DC limit medical debt on credit reports. But the CFPB said in October 2025 that federal law preempts these state laws, and that's being litigated. Check your state's current status. Examples:
| State | Protection |
|---|---|
| New York | Medical debt banned from credit reports |
| Colorado | Medical debt banned from credit reports |
| California | Limits both furnishing and reporting of medical debt (SB 1061) |
| Illinois | Medical debt cannot affect credit score |
| Washington | Strong medical debt protections |
If you live in one of these states, state law may give you more protection. Check its current status, since federal preemption is being fought in court.
How Scoring Models Treat Medical Debt
Even when medical debt is reported, newer scoring models treat it differently:
- FICO 9: Ignores paid medical collections entirely
- FICO 10: Also treats medical debt more favorably
- VantageScore 3.0 and 4.0: Ignore medical collections completely, paid or unpaid
- FICO 8: Still counts medical debt (but many removed under bureau policies)
What to Do If You See Medical Debt on Your Report
1. Check If It Violates Current Rules
Dispute medical debt if:
- It's already paid — Should be removed
- It's under $500 — Shouldn't be there
- It's less than 12 months old — Too early to report
- You live in a state with protections
2. File Disputes
Dispute directly with the credit bureaus:
- Experian: experian.com/disputes
- Equifax: equifax.com/personal/credit-report-services
- TransUnion: transunion.com/credit-disputes
State specifically why the debt shouldn't be there (paid, under $500, etc.).
3. Verify the Debt
If you don't recognize the debt, send a debt validation letter to the collection agency by the dispute deadline printed on their validation notice — generally 30 days after you receive it. Once you dispute in writing, they must pause collection until they verify the debt. Ask them to show:
- The amount owed
- The original creditor
- That you're obligated to pay
4. Check for Insurance Issues
Medical debt often results from:
- Insurance denials that should be appealed
- Balance billing (illegal in many states)
- Billing errors
- Claims filed too late by provider
Contact your insurance company and review Explanation of Benefits (EOB) statements before paying.
Should You Pay Old Medical Debt?
Strategic considerations:
If debt is under $500:
Shouldn't be on your report. Dispute it before paying.
If debt is already paid:
Should already be removed. Dispute if still showing.
If debt is $500+ and unpaid:
Paying removes it under current bureau policies. Consider paying or settling.
If applying for mortgage:
Fannie Mae doesn't require you to pay off medical collections to close, though they can still lower the credit score your lender pulls.
Medical Debt and Mortgages
Good news for homebuyers: Fannie Mae doesn't require you to pay off medical collections to close, though they can still lower the credit score your lender pulls.
This means you can often qualify for a mortgage even with unpaid medical debt on your report.
The Bottom Line
Medical debt's impact on credit has been dramatically reduced:
- Paid medical debt: Removed from reports
- Under $500: Not reported
- 12-month waiting period: Time to resolve before reporting
- State laws: May provide additional protection
- Mortgages: Fannie Mae doesn't require medical collections to be paid off to close
If you see medical debt on your credit report that violates these rules, file a dispute. The bureaus' own policies say it shouldn't be there, and they must investigate your dispute, usually within 30 days.