How Does Medical Debt Impact My Credit Score?

How Does Medical Debt Impact My Credit Score?

Medical debt remains one of the top reasons Americans file bankruptcy. But how FICO and the three major credit bureaus—Experian, TransUnion, and Equifax—treat your medical debt is changing significantly.

Medical debt remains one of the top reasons Americans file bankruptcy

small-image-Medical-DebtPaid Medical Debts

If you have medical debts on your credit report and you eventually pay them, the new FICO credit score model won’t count that medical debt against you at all—even if they went to collections. That means that just paying off medical debt could potentially improve your score by 30 points or more.

Delayed Reporting

The three credit bureaus have decided to hold medical debt for 180 days before placing it on your credit report.  This was put in place because many debt collectors were parking medical debt on consumer’s credit reports even before the consumer got a bill or before the consumer’s insurance provider could pick up the tab. The new rules mean that you won’t be punished if your insurance provider is slow in paying medical providers or if you have a coverage dispute.  If you’re getting medical services not covered by your health insurance, you’ll have 180 days to pay your bill before it impacts your credit.

Unpaid Medical Debts

Unfortunately, unpaid medical debts will still heavily impact your credit score.  One way to lessen the impact of medical debt you can’t afford to pay is to have it discharged in Chapter 7 bankruptcy or repay it over time in Chapter 13 bankruptcy.

If you’re struggling with medical debt, act fast to pay them off before they land on your credit report. Or, file bankruptcy to have your medical debt forgiven completely.

(sources:  and