How to Deal With Medical Bills on Your Credit Report

Unpaid medical bills take longer to hit your credit report and are weighed less heavily in some scores, but they can affect your credit.
NerdWalletSep 9, 2021
medical bills on credit report

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A serious illness or injury can be disruptive. You need to heal, and you may be overwhelmed for a while as you put your work and family life back together.

There’s a strong chance your finances will be affected, too. If an unpaid medical bill makes its way to your credit reports, your credit scores could suffer for years. (Read more about ).

Here's how unpaid medical bills affect your credit and how to deal with the fallout if you

Unlike a bank or credit union, your doctor’s office probably doesn’t have a direct relationship with the that collect data and isn't regularly reporting your payment information.

As of Sept. 15, 2017, there's a 180-day waiting period before unpaid medical debts can show up on people’s credit reports.

Eventually, your medical provider may turn over an unpaid debt to a collections agency. The collector will then contact you and try to get you to pay up. At this point, your unpaid bill probably is showing up on your as having gone to collections.

This is where things get messy, because the information on your credit reports is used to create . Failure to pay a bill affects the biggest factor determining your credit scores: payment history. Consequently, having a medical bill in collections can result in serious damage to your credit scores.

There is a way out, however: Medical collections will drop off a credit report if the bills are paid by a health insurer.

If your medical bill is in collections by error and is hurting your credit score, you’re probably wondering if it can be removed. If the bill is less than 180 days old or if it has now been paid by insurance, you should be able to with the credit bureau.

There’s no guarantee the error will be removed from your credit report. But the effort is worth it because  can make borrowing money really expensive.

Here are the steps to take:

Medical debt collections have to come off the reports if the health insurance company pays up. But what if you don't have insurance, you can't get the insurer to pay or you get tired of waiting on insurance and pay off a collections account yourself?

The damage to your credit depends on the type of scoring model and the version used by a potential creditor to check your creditworthiness.

FICO 8, the credit scoring model most lenders rely on, treats collections accounts the same, no matter whether they're paid or unpaid. So the damage has been done regardless of whether you pay — although paying will get the bill collector off your back and remove the risk of it suing you for payment.

The FICO 9 scoring model and the VantageScore 3.0 disregard collections accounts that have been paid. FICO 9 will weigh medical bills in collections less heavily than other types of unpaid accounts. However, FICO 9 is not in widespread use by lenders. VantageScore 3.0, a competitor to FICO, is more widely used.

Collections accounts can take up to seven years to drop off your credit report, although the impact on your credit score will lessen over time. To help your score rebound, the best thing to do is keep consistent credit habits as much as you can, such as paying your other bills on time and keeping your credit card balances low.

You can take some steps to prevent future medical bills from affecting your credit.

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