Episode 119

How New Changes to Medical Debt Reporting Can Boost Your Credit Score!

Medical Debt and How it Affects Your Credit Score

According to the Consumer Finance Protection Bureau, Americans are struggling with roughly $88 billion in medical debt. Unfortunately, this debt ends up being reported to the credit bureaus as medical collections. The reason it ends up being reported as medical collections is because there are a lot of people that are unable to pay their medical bills on time or all at once. Having this debt reported to the credit bureaus causes a negative effect on one’s credit report. This means if you are going to apply for a mortgage or car loan, that medical debt will show up and lenders may not approve you or they will offer you financing, but it will be a higher interest rate and not on the terms you want. 

Changes in How Your Medical Debt is Reported

As of July 1, 2022, if you have a paid medical collection it will no longer affect your credit score or appear on your credit report. This is great news for those that are trying to build their credit score, but have had this medical collection prolonging that. Secondly, the time that it takes for unpaid medical collections has gone up to one year instead of six months that it takes to be reported. Under previous law, the collection agency was able to put the medical debt on your credit report after 180 days. With the new law, they won’t be able to add it on your credit report until it has been a full year. With this change, it allows people more time to pay off their debt. Lastly, starting in 2023 if there is any medical collection that is $500 or less, then it will not make it on to your credit report. It’s important to note that even though it will not make it to your credit report, it will still go to collections and you are still responsible for it. However, it won’t negatively affect your credit score. 

Key Takeaways:

  • Paid medical debt will no longer show up on your credit report or affect your credit score.
  • Under new law, medical debt cannot be reported to collection agencies for 1 year. 
  • It is always worth it to call your medical provider and see what options you have as far as payment goes. 
  • $500 dollars or less in medical debt will not show on your credit report.
  • Check your credit score! If you have a paid medical debt make sure it is no longer on your credit report. You can get a free copy of your credit report at annualcreditreport.com (available weekly until the end of 2022)


Can medical debt impact credit scores: Equifax®. Can Medical Debt Impact Credit Scores | Equifax®. (2022). Retrieved August 16, 2022, from https://www.equifax.com/personal/education/credit/score/can-medical-debt-impact-credit-scores/

Holzhauer, B. (2022, June 28). As of July 1, your medical debt may no longer hurt your credit score-here’s why. CNBC. Retrieved August 16, 2022, from https://www.cnbc.com/select/medical-debt-credit-report/


In this episode, Luis speaks about the following and more:

  • New changes to medical debt collection reporting on credit reports
  • Understanding your explanation of benefits
  • Tips to navigate medical debt
  • How to plan ahead in order to maximize your health insurance benefits and minimize medical debt