Do Medical Bills Affect Your Credit Score? Here is What to Do

Do Medical Bills Affect Your Credit?

Medical bills can cause worry if you cannot pay them back on time. This also raises the question of whether medical bills can affect credit scores.

There’s no need to worry as medical bills differ from other kinds of debt. Unpaid medical bills take significantly longer to reflect on your credit report.

Medical bills are treated differently than other forms of debt.

According to a survey by The Commonwealth Fund, over 100 million people in the US have medical billing and debt issues.

Reports from the US Census Bureau data show that around 19% of US households have an average of $4,600 in medical debt.

According to research by the CFPB, in the second quarter of 2021, medical debt accounted for 58% of all bills in collections, with consumers’ credit records showing $88 billion in outstanding medical debt. (1)

Do medical bills affect credit

Ideally, medical bills do not affect your credit score as long as you pay them. Most healthcare providers do not report to the three major credit bureaus in the United States.

Hence, the unpaid medical bill will first be sold to a collections agency. Later, if it remains unpaid, it will be reflected on the credit report.

Usually, healthcare providers wait for 30 to 180 days before reporting the case to a collection agency. This depends on your particular healthcare provider.

Even if your medical debt goes to a collection agency, the amount is not immediately reflected on your credit reports.

Grace Period for Unpaid Medical Bills

Recent policy changes have extended the grace period for reporting unpaid medical bills to credit bureaus to one year (365 days), giving consumers more time to resolve their debts. So, it is safe to say that unpaid medical bills will not immediately affect your credit score.

This grace period is offered to allow the payee maximum repayment opportunities. Insurance companies often take months to clear or reimburse covered expenses.

However, this does not mean that you can ignore medical bills. Unpaid medical bills will eventually affect your credit drastically once they are reported.

Quick action is strongly advised to resolve unpaid medical bills. This is necessary to prevent medical bills from affecting your credit.

Keep in touch with your insurance provider and get updates on the payment process.

If the medical bill’s expenses are not covered by insurance, you can talk to your healthcare provider.

This way, you can work out an easier and more efficient repayment method with them.

Can medical bills be removed from credit

If you find inaccuracies or mistakes on your medical bills, you can dispute them with the credit bureaus.

Once the medical bill dispute gets settled in your favor then, you can update the account and get the medical bill removed from your credit report.

You can file such disputes free of charge. However, you must file them separately with the three bureaus with incorrect details.

Be ready to share evidence supporting your claim. For instance, get records from the healthcare provider, insurance company, collections agency, credit card statement and any canceled check copies.

Do you need to pay medical bills to upgrade your credit

Pay off undisputed medical bills as soon as possible. Once you or the insurance provider pay off the bill amount, it gets updated on your credit report.

This has an immediate positive impact on your credit score. Paying off medical debt can improve your credit score, especially under newer credit scoring models that give less weight to paid collection accounts, including medical debt.

The reason is that the latest credit scoring models ignore paid collection accounts. So, if you pay off the medical debt, your credit score may improve noticeably.

Even with older credit scoring models, paying off medical debt can stop the negative reporting, potentially improving credit scores indirectly by removing the negative impact of outstanding collections. Hence, paying off medical debts and improving your credit approval rating makes sense.

However, we don’t know what credit scoring model the lender uses. Thus, paying off medical bills as soon as possible is imperative.

How to negotiate a settlement for unpaid medical bills

If you think you are unable to pay off the medical bills on time, then you can choose one of the options below:

Negotiate your medical bills

Healthcare providers usually allow certain facilities for patients to pay off their medical bills. For instance, some medical service providers offer significant discounts if you pay a lowered amount in full.

They also allow patients to make a down payment and pay off the remaining bill in installments.

Work out a repayment plan

Your healthcare provider may also be willing to break down the medical bill into monthly payments. This is an easier and more budget-friendly way to repay outstanding medical bills.

Just be sure to inquire about any interest or additional charges/fees the healthcare provider will charge to the original bill amount.

Consult a medical billing advocate

Medical billing advocates specialize in resolving issues of unpaid or disputed medical bills. They work with the healthcare provider and the insurance company on behalf of the patient.

Although the service is not free, the results are definitely worth the cost. Using their services can save you thousands of dollars at a time.

This is also an efficient way to discuss terms with insurers and healthcare providers.

Find out about financial assistance

You may qualify for several financial assistance programs if you fall into the specified income group.

Medicaid, local and state governments, religious groups or charities, and several nonprofit organizations offer these.

Use a credit card or personal loan

Using a credit card or applying for a personal loan to pay off outstanding medical bills should be the last option. You should consider the interest on the borrowed amount you will have to repay.

Medical loan options are also available. Here is how to apply for a medical loan with a decent credit score. And here is how to apply for a medical loan with a bad credit score.


With time, the medical collection account will lose its significance and eventually get dropped altogether from the credit report.

However, financial experts strongly advise clearing any medical bills as soon as possible to prevent your credit score from being negatively affected.

Make sure to consult with your healthcare provider first for alternative ways to pay off your medical bills.

See Also

How to Get Medical Bill Debt Forgiveness

Grants for Medical Bills

Current Version
January 7, 2022
Written By
Shubham Grover
March 29, 2024
Updated By
Andrea Morales G.

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