(As of June 2025) Medical bills used to be one of the most common reasons for credit score drops in the U.S. But recent policy changes by major credit bureaus and federal agencies have significantly altered how unpaid medical debt is reported.
In this article, weโll explore the 2025 updates to medical collections reporting, what kinds of debt still affect your credit, and how to prevent damage to your financial profile.
Learn what changed in medical debt reporting and how to protect your credit in 2025.
What Is Medical Debt and Why Does It Matter?
Medical debt is any unpaid bill from hospitals, clinics, labs, or doctors’ offices. In the past, even small unpaid balances could end up on your credit report, hurting your score and limiting your ability to get loans or rent housing.
What Changed in 2025 for Medical Debt Reporting?
Thanks to joint reforms by the Consumer Financial Protection Bureau (CFPB) and the three major credit bureaus (Equifax, Experian, TransUnion), medical debt reporting rules changed dramatically:
- ๐งพ Medical debts under $500 are no longer reported
- ๐ All medical collections must be at least 1 year old before showing up
- โ Paid medical collections are removed from credit reports
As of January 2025, over 70% of medical debt has been removed from credit files.
๐ข How to Protect Your Credit Score from Medical Collections
Although rules have improved, certain types of medical debt can still affect your credit. Hereโs how to avoid it:
- Ask for an itemized bill and review charges for errors
- Negotiate payment plans directly with your provider
- Use charity care or financial assistance programs if available
- Check your credit report regularly for incorrect entries
What Debts Are Still Reported?
As of 2025, only the following may still show up on your credit report:
- โข Unpaid medical debts over $500
- And only if they are more than 12 months old
- โข Debts not classified as medical
- Such as credit cards, personal loans, or non-healthcare collections
If you believe a debt was incorrectly reported, you can file a dispute with the credit bureau online for free.
Does Medical Debt Still Lower Your Score?
It depends. According to FICO and VantageScore, new scoring models reduce the impact of medical collections. However, some lenders still use older models where unpaid medical bills can hurt you.
๐ Tip: Ask lenders which credit score version they use, especially for mortgages or auto loans.
Frequently Asked Questions
Q1. Can hospitals send me to collections if Iโm on Medicaid?
In most states, hospitals must screen for financial assistance before sending a Medicaid recipient to collections, but policies vary.
Q2. Do I need to pay medical debt if itโs not on my credit report?
Yes. Even if it’s not reported, you still owe the bill. Ignoring it could lead to lawsuits or wage garnishment.
Q3. Can I remove old medical debt from my credit file?
If the debt is paid or qualifies under the new 2025 rules, you can request removal. Use online dispute tools from the credit bureaus.
Q4. Will unpaid hospital bills affect my mortgage application?
Possibly. Some lenders still consider medical debt when evaluating risk, even if itโs not on your credit report.
Q5. Whatโs the best way to avoid medical collections?
Apply for charity care, set up a payment plan, and monitor your credit report regularly through AnnualCreditReport.com.
CFPB