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

Do Medical Bills Affect Your Credit Do Medical Bills Affect Your Credit

Do Medical Bills Affect Your Credit?

Medical bills can cause worry if you are unable to 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 are different than 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 79 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 US$ 2,000 in medical debt.

A Credit Karma report also disclosed that around 21 million members in the US have about US$ 47 billion of medical debt in collections.

Do medical bills affect credit?

Do Medical Bills Affect Your Credit

Do Medical Bills Affect Your Credit – Credit Score

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 operating in the United States.

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

Usually, healthcare providers wait for almost 120 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 reflected on credit reports right away.

Grace Period for Unpaid Medical Bills

The major credit bureaus offer a 6-month (180 days) waiting period to resolve the unpaid medical bill. So, it is safe to say that unpaid medical bills will not immediately affect your credit score.

This grace period is offered to allow for maximum repayment opportunities for the payee. Insurance companies often take some 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.

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

Make sure to keep in touch with your insurance provider and get updates on the payment process.

In case the medical bill’s expenses are not covered by insurance, then 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, then 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. You will need to file the disputes 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 paying medical bills to upgrade your credit?

It is strongly advised to 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. However, it will not necessarily boost your credit score.

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

Those using older credit scoring models consider unpaid medical bills, though. Hence, it makes sense to pay off medical debts and improve your credit approval rating significantly.

However, we don’t have a way to find out the type of credit scoring model that the lender uses. Thus, it is imperative to pay off medical bills as soon as possible.

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.

If you fall into the specified income group, then you may qualify for several financial assistance programs.

These are offered by Medicaid, local and state governments, religious groups or charities and several nonprofit organizations too.

Use a credit card or personal loan.

Using a credit card or applying for a personal loan to clear outstanding medical bills should be the last option. You need to think about 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 getting affected negatively.

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

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I am a dedicated healthcare researcher and an enthusiast specializing in medical grants, medical education and research. Through my articles, I aim to empower healthcare professionals and researchers with valuable insights and resources to navigate these critical aspects effectively.

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