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How Does Medical Debt Affect My Credit?

Sarah Edwards | May 29, 2024

Sarah Edwards
Legal Expert
Sarah Edwards, BS

Sarah Edwards is a professional researcher and writer specializing in legal content. An Emerson College alumna, she holds a Bachelor of Science in Communication from the prestigious Boston institution.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: Medical debt can lower your credit score, but only if the amount exceeds $500 and your debt has gone unresolved for over a year. Paid medical debt will automatically disappear from your credit report. SoloSuit provides tips and tools to negotiate a lower settlement and get a clean bill of financial health.

Your credit score serves as your financial report card. It reflects your history of paying your bills on time and is used to determine your future creditworthiness in the eyes of lenders or even landlords. A low credit score can jeopardize your ability to secure an auto loan, mortgage, or even an apartment.

But can medical debt impact your credit? Unfortunately, yes. Outstanding debt can show up on your credit report for years, even if it’s medical. Thankfully, there are effective ways to navigate medical debt and improve your credit score.

Settle your medical debt.

You can negotiate debt settlement at any stage of the collections process, even for medical debt. SoloSettle makes it easy.

Settle with SoloSettle

Know when medical debt appears on your credit report

Medical debt typically doesn’t appear on your credit report right away. Take a closer look at when you can expect to see medical debt pop up on your credit report.

You have an initial non-reporting period

In most cases, medical providers don’t turn you over to collections right away. Usually, your debt must remain unpaid for a period of 60 to 180 days before your healthcare provider will turn your debt over to collection agencies.

You have a one-year grace period

Even if your healthcare provider turns you over to collections, recent regulations prevent medical debt from appearing on your credit report for one full year. This provides you ample time to dispute issues and resolve debt before having it impact your credit.

Consider the ways medical debt impacts your credit score

Medical debt can lower your credit score — though not always! Here are some key things to know about how medical debt can show up on your credit report.

Small debts don’t appear on your credit report

As of March 2023, small debts under $500 are excluded from your credit report. This decision came directly from the three major credit bureaus as a way to prevent small debts from impacting your credit.

Paid medical debts are removed from your credit report

Once your medical debt is paid, your debt is removed from your credit report. This is different from other consumer debt, which can remain on your credit report for up to seven years.

Unpaid debt can still lower your credit

Despite these provisions, unpaid medical debt exceeding $500 can still show up on your credit report if you carry the debt for more than a year. That’s why it helps to check your credit score once each year to make sure that your debts are cleared and that there are no errors that can lower your credit score.

Medical debt may impact your credit less than other consumer debts

According to the credit bureaus themselves, medical debt may still impact your score less than other forms of consumer debt. This is because credit bureaus give less weight to debts that were incurred voluntarily, and medical debt is less predictive of future financial behavior.

Remove medical debt from your credit report

What happens if you exceed the $500 threshold, and your medical debt remains unpaid for over a year? Not only will you receive calls from medical debt collectors, but your credit score can take a hit. Fortunately, you have several options to remove medical debt from your credit report once and for all.

Contact your insurance provider

In the best-case scenario, your medical debt may be due to a billing or insurance error. Start by contacting your health insurance provider to determine whether they can cover the cost of the procedure.

If you’re not sure whether a debt is legitimate, validate it using tips from the following video.

File for bankruptcy

Medical bills are considered unsecured debt, so filing for bankruptcy can eliminate medical debt altogether. However, bankruptcy can have a dramatic effect on your credit score, which means it should generally be used as an absolute last resort.

Negotiate a lower settlement amount

Typically, your best option is to pay off your debt once and for all, which will remove your debt from your credit report. But what if you don’t have the financial means to do so? You might consider negotiating with your creditor or debt collector for a lower amount.

SoloSettle makes the process easy by providing you with the means to negotiate with your creditors without having to interact with them directly. Instead, you can use SoloSettle to submit an initial offer, and then reach a settlement. SoloSettle can even handle the payment process.

Let’s consider an example.

Example: Janet was in the process of buying a car when she learned that she had medical debt lingering on her credit report. It was over a year old and had gone to a medical debt collection agency. To eliminate this debt, Janet turned to SoloSettle. Using the program, she offered to pay 60% of her original debt. Her debt collector rejected this offer, but submitted a counteroffer for 63% of the total debt. Janet agreed, and after settling her debt for less than what she owed, the debt was removed from her credit report.


Start negotiating your medical debt today with SoloSettle.

We asked a lawyer for some debt settlement negotiation tips. Check out the video below to learn more:

Can I be sued for medical debt?

While you have certain protections from medical debt impacting your credit, you can still be sued for unpaid medical debt. When this happens, don’t panic — just make sure to respond right away. Filing an Answer with the local court will communicate that you intend to fight the lawsuit.

Acting fast is important because some jurisdictions allow as little as 14 days to file an Answer. Miss this deadline, and the court can issue a default judgment, in which case you’re liable for the debt as well as any additional legal fees that the court assesses.

SoloSuit makes it easy to file an Answer on time. Just answer a few questions, and you’ll generate an Answer. SoloSuit can even file it on your behalf so that you don’t have to worry about missing the deadline.

Draft and file your Answer today to avoid a default judgment.

Get a clean bill of financial health

Remember, the sooner you resolve your medical debt, the sooner you can see it removed from your credit report. You may even be able to avoid seeing it appear on your credit history at all. Let SoloSuit help you get out of debt and work on improving your financial health today.

Settle with SoloSettle

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