Medical debt on your credit report dropped your score by an average of 22 points, according to CFPB research. The rules changed dramatically in 2025–2026: a federal rule that would have wiped $49 billion in medical debt from credit reports was struck down by a court, but credit bureaus voluntarily removed billions more, and 9 new state laws took effect. Here’s what’s actually protected right now and what to do if medical debt is hurting your credit.
1. The current rules (February 2026)
The credit reporting landscape for medical debt is a patchwork of voluntary bureau policies, a failed federal rule, and state laws. Here’s what the three major bureaus — Equifax, Experian, and TransUnion — actually do right now.
In March 2023, the bureaus announced voluntary changes that removed a significant portion of medical debt from credit reports. These changes remain in effect as of February 2026 and are the baseline protections available to every American, regardless of state:
| Medical Debt Type | Reported on Credit? | Why |
|---|---|---|
| Paid medical collections | No — removed | Voluntary bureau policy since July 2022 |
| Unpaid medical debt under $500 | No — removed | Voluntary bureau policy since April 2023 |
| Medical debt less than 12 months old | No — not yet reportable | Voluntary bureau policy since July 2022 (up from 180 days) |
| Unpaid medical debt over $500, 12+ months old | Yes — still reported | No federal or voluntary protection (unless state law applies) |
Key takeaway
If you have a medical collection under $500, a paid medical collection, or a medical debt less than 12 months old on your credit report, it should not be there. Pull your reports at AnnualCreditReport.com and dispute any entries that violate these rules. Before paying a collector, upload your bill to BillKarma to check for billing errors — 38% of medical bills in collections contain mistakes.
2. The CFPB rule that almost changed everything
In January 2025, the Consumer Financial Protection Bureau finalized its most ambitious medical debt rule: a blanket ban on medical debt appearing on consumer credit reports. The CFPB estimated the rule would remove $49 billion in medical debt from credit reports and boost scores for 15 million Americans. It was the culmination of years of CFPB research showing that medical debt is a poor predictor of creditworthiness.
What the rule would have done:
- Prohibited credit reporting agencies from including any medical debt on consumer credit reports
- Banned lenders from using medical debt information in credit decisions
- Required removal of all existing medical debt tradelines, regardless of amount or payment status
- Closed the gap left by voluntary bureau rules (unpaid debt over $500 after 12 months)
What happened: In July 2025, a federal court struck down the rule in AHA v. CFPB. The American Hospital Association and credit reporting industry argued the CFPB overstepped its statutory authority under the Fair Credit Reporting Act. The court agreed, ruling that the FCRA gives furnishers the right to report accurate information and the CFPB could not categorically prohibit an entire class of data.
The aftermath: The Trump administration’s CFPB declined to appeal the ruling. More controversially, the administration argued the court decision should preempt state laws that restrict medical debt credit reporting — an argument several state attorneys general have formally rejected. As of February 2026, this preemption question remains unresolved in the courts.
| Timeline | Event | Status |
|---|---|---|
| January 2025 | CFPB finalizes medical debt credit reporting ban | Struck down |
| July 2025 | Federal court strikes down rule in AHA v. CFPB | Final — no appeal |
| September 2025 | CFPB argues ruling preempts state laws | Disputed by state AGs |
| 2025–2026 | 9 new state laws take effect | Active and enforced |
| February 2026 | Voluntary bureau rules remain in place | Active |
Key takeaway
The federal rule is dead for now. But the voluntary bureau rules (paid debt removed, under-$500 removed, 12-month waiting period) remain in effect. And state laws have stepped in to fill the gap in many parts of the country. Your protections depend heavily on where you live.
3. State protections: who’s covered
With the federal rule struck down, state legislatures moved aggressively in 2025–2026. At least 10 states now have laws restricting medical debt credit reporting beyond the voluntary bureau baseline. If you live in one of these states, you may have significantly stronger protections:
| State | Law / Effective Date | What It Protects |
|---|---|---|
| Colorado | HB 22-1285 / 2023, expanded 2025 | Bans reporting of medical debt under $2,500; requires 120-day notice before collections; financial assistance screening required |
| California | SB 1061 / 2025 | Prohibits medical debt from appearing on credit reports; applies to all consumer credit reporting statewide |
| New York | Medical Debt Protection Act / 2025 | Bans credit reporting of medical debt; limits interest on medical debt to 2%; restricts wage garnishment for medical debt |
| Connecticut | SB 1004 / 2025 | Prohibits reporting of medical debt under $1,000; requires 180-day notice before any collection activity |
| Maryland | Medical Debt Protection Act / 2024 | Restricts medical debt credit reporting; limits collection actions on patients below 300% FPL |
| Nevada | AB 307 / 2025 | Bans credit reporting of medical debt under $2,500; requires screening for financial hardship programs |
| Illinois | Patient Billing Act amendments / 2025 | Prohibits reporting of medical debt for patients under 400% FPL; extends charity care requirements |
| Washington | HB 1531 / 2025 | Bans medical debt credit reporting; restricts collection lawsuits; requires charity care screening |
| Oregon | SB 490 / 2025 | Prohibits medical debt reporting for patients under 400% FPL; requires 240-day notice before collections |
| Minnesota | HF 2127 / 2026 | Bans all medical debt credit reporting; caps interest at 0%; restricts garnishment and liens |
Key takeaway
If you live in California, New York, Washington, or Minnesota, medical debt should not appear on your credit report at all under state law. If you’re in Colorado or Nevada, debts under $2,500 are protected. Check whether your state offers protections and cite the specific statute when disputing entries with credit bureaus.
4. How medical debt affects your credit score
Not all credit scores treat medical debt the same way. The scoring model your lender uses determines how much — or how little — a medical collection hurts your score. This is critical because most consumers don’t get to choose which model a lender uses.
| Scoring Model | Paid Medical Collections | Unpaid Medical Collections | Who Uses It |
|---|---|---|---|
| FICO 8 | Still scored (reduced weight vs. other collections) | Full negative impact | Most credit card issuers, auto lenders, many mortgage lenders |
| FICO 9 | Ignored entirely | Weighted less than non-medical collections | Some mortgage lenders, personal loan products |
| FICO 10T | Ignored entirely | Reduced weight; uses trended data | Fannie Mae and Freddie Mac (mandated 2025+) |
| VantageScore 4.0 | Ignored entirely | Reduced weight vs. other collections | Free credit score services, some fintech lenders |
The mortgage problem: If you’re applying for a mortgage, this matters enormously. Many mortgage lenders still use FICO 8 or older models, which treat medical collections nearly as harshly as other types of debt. Fannie Mae and Freddie Mac mandated a transition to FICO 10T starting in 2025, which is more forgiving of medical debt — but adoption is uneven, and many lenders still pull FICO 8 scores during underwriting.
The 22-point problem: CFPB research found medical debt lowers credit scores by an average of 22 points. That may sound small, but for someone on the threshold of a credit tier (e.g., 738 vs. 760), those 22 points can mean a 0.5% higher mortgage interest rate — costing $20,000–$40,000 over the life of a 30-year loan.
Key takeaway
Ask your lender which FICO version they use before you apply. If they use FICO 9, FICO 10T, or VantageScore 4.0, paid medical collections won’t hurt you at all. If they use FICO 8, a paid collection still appears with reduced weight. For deeper analysis of your specific situation, see our companion guide on medical debt and your credit score.
5. How to check if medical debt is on your report
Before you can fix the problem, you need to know exactly what’s on your report. Here’s the step-by-step process:
Step 1: Pull all three reports. Go to AnnualCreditReport.com — the only federally authorized source for free credit reports. You’re entitled to one free report per bureau per week (this was extended through 2026). Pull all three because medical debt may appear on one bureau’s report but not another.
Step 2: Search for medical collections. Look in the “Collections” or “Adverse Accounts” section of each report. Medical collections typically show the original provider name or “medical” in the creditor field. Note the creditor name, account number, balance, date of first delinquency, and reporting date for every entry.
Step 3: Cross-reference against current rules. For each medical collection, check:
- Is the debt paid? If yes, it should not be on your report (2022 bureau policy).
- Is the balance under $500? If yes, it should not be on your report (2023 bureau policy).
- Was the debt first reported less than 12 months ago? If yes, it should not be on your report (2022 bureau policy).
- Does your state ban medical debt credit reporting? If yes, it should not be on your report regardless of amount.
Step 4: Document everything. Screenshot or save each report. Note which entries violate current rules. You’ll need this documentation for the dispute process.
Sample credit report entry — medical collection
6. How to remove medical debt from your credit report
There are four methods to get medical debt removed from your credit report. Start with method 1 and work down — each subsequent method requires more effort.
Method 1: Verify it qualifies for automatic exclusion
Check whether the debt should already have been removed under voluntary bureau rules (paid, under $500, or less than 12 months old). If it should be gone, skip to the dispute process below. This is the fastest path — you’re not negotiating, you’re enforcing existing policy.
Method 2: Dispute inaccurate entries with the bureaus
Under the Fair Credit Reporting Act (FCRA), you have the right to dispute any inaccurate information. File disputes separately with each bureau that shows the entry. Include:
- Your full name, address, and Social Security number
- The specific account you’re disputing (account number and creditor name)
- A clear statement of the error: “This medical debt of $380 is under the $500 threshold and should not be reported under current credit bureau policies”
- Supporting documentation (EOB, payment receipts, itemized bill)
Send via certified mail with return receipt. The bureau must investigate within 30 days (45 days if you submit additional information). If the collector cannot verify the debt or the entry violates reporting rules, it must be deleted.
Method 3: Negotiate a pay-for-delete agreement
If the debt is valid and over $500, consider a pay-for-delete negotiation. You offer to pay a portion of the balance in exchange for the collector’s written agreement to remove the tradeline from all three bureaus. Typical settlements land at 30–50% of the balance. Under the 2023 bureau rules, paying a medical collection triggers automatic removal anyway — so even if the collector won’t agree to explicit deletion, paying still gets it off your report.
Before paying any collector, upload your original bill to BillKarma to check for billing errors. If the original bill was wrong, the collection amount is wrong — and you may owe less than they claim.
Method 4: Cite state law in your dispute
If your state has a medical debt credit reporting law (see the table in Section 3), cite the specific statute in your dispute letter. Example: “Under California SB 1061, effective 2025, medical debt is prohibited from appearing on consumer credit reports. I request immediate deletion of this tradeline.” State law disputes carry additional legal weight because violations can lead to regulatory action against the bureau.
Key takeaway
Most medical debt that remains on credit reports shouldn’t be there. The voluntary bureau rules and state laws have created a strong foundation for removal. Start by checking whether the debt qualifies for automatic exclusion, then escalate to formal disputes. For help navigating the dispute process and fighting unfair debt, see our debt fighting tools.
7. Common scenarios and what to do
Scenario 1: “I paid the bill but it’s still on my credit report”
A BillKarma user in Denver paid a $1,200 hospital bill in March 2025 after it went to collections. Six months later, the collection was still showing on her Experian report. Under the 2022 voluntary bureau policy, paid medical collections must be removed.
What she did: Filed a dispute with Experian, attaching her payment receipt and bank statement showing the cleared payment. She cited the Equifax/Experian/TransUnion joint announcement of March 2023 removing paid medical collections.
Result: Experian deleted the entry within 18 days. Her credit score increased by 31 points.
Lesson: Paying a medical collection should trigger automatic removal, but bureaus don’t always process it promptly. Always follow up with a dispute if the entry persists beyond 60 days after payment.
Scenario 2: “It’s under $500 but still showing on my report”
A user in Atlanta had a $340 medical collection from a lab bill on his TransUnion and Equifax reports. The 2023 bureau policy should have excluded this debt entirely.
What he did: Filed disputes with both bureaus, citing the April 2023 policy change and attaching the original bill showing the $340 balance. He also verified the bill was accurate by running it through our bill scanner.
Result: Both bureaus removed the entry within 22 days. His score jumped 19 points on TransUnion and 24 points on Equifax.
Lesson: Under-$500 medical debts should not appear on your report. If they do, dispute immediately — this is a straightforward removal.
Scenario 3: “My state banned medical debt reporting but it’s still on my report”
A New York resident had a $2,800 unpaid medical collection from a 2023 ER visit on all three reports. New York’s Medical Debt Protection Act, effective 2025, prohibits medical debt from appearing on credit reports for New York residents.
What she did: Filed disputes with all three bureaus, citing New York’s Medical Debt Protection Act and including her New York driver’s license as proof of residency. She also filed a complaint with the New York Attorney General’s office.
Result: All three bureaus deleted the entry within 30 days. She also scanned the original bill and found a $460 duplicate charge, which she used to negotiate a reduced settlement on the underlying debt.
Lesson: State laws are powerful tools. If your state prohibits medical debt credit reporting, cite the statute explicitly and include proof of residency. Filing a complaint with your state AG adds enforcement pressure.
Scenario 4: “I have medical debt over $500 in a state with no protections”
A user in Texas had a $3,400 medical collection from a surgery that went to collections in 2024. Texas has no state medical debt credit reporting law, the federal CFPB rule was struck down, and the balance exceeded the $500 voluntary threshold.
What he did: First, he uploaded the original bill to BillKarma and found $780 in overcharges (upcoded anesthesia and a duplicate facility fee). He disputed the original bill with the hospital, reducing the balance to $2,620. He then sent a pay-for-delete letter to the collector offering $900 (34%). The collector accepted $1,050 (40%) with written deletion.
Result: Saved $2,350 off the original collection. All three tradelines deleted within 45 days. Credit score increased by 47 points.
Lesson: Even without state protections, you have options. Check the underlying bill for errors first, then negotiate aggressively. Medical debt collectors purchased the debt for pennies on the dollar and will accept steep discounts.
8. Preventing medical debt from reaching your credit
The best strategy is keeping medical debt off your credit report in the first place. You have a 12-month window from the first delinquency before the debt can even appear — use that time wisely.
Step 1: Dispute the underlying bill first. Request an itemized bill within 30 days of any medical service. Upload it to BillKarma to check for duplicate charges, upcoding, unbundling errors, and charges for services not received. BillKarma’s analysis of 6,800+ hospitals found that 43% of patients with outstanding balances had at least one billing error.
Step 2: Apply for financial assistance before the debt goes to collections. If you’re struggling to pay, apply for the hospital’s charity care or financial assistance program. Nonprofit hospitals (60% of US hospitals) are legally required to offer these programs. If your income is under 200% of the Federal Poverty Level ($31,200 for an individual in 2026), you likely qualify for 100% forgiveness. Even patients above that threshold often qualify for significant discounts.
Step 3: Negotiate before collections. Call the hospital’s billing department and request a payment plan or a cash-pay discount. Most hospitals prefer receiving $50/month directly over selling the debt to a collector for 4–7 cents on the dollar. Payment plans generally prevent the account from being sent to collections.
Step 4: Get everything in writing. If you establish a payment plan, dispute a charge, or receive financial assistance approval, get written confirmation. If the hospital later sends the account to collections despite your agreement, that documentation is your evidence for a dispute.
Step 5: Monitor your credit. Set up free monitoring through your bank or at AnnualCreditReport.com. If a medical collection appears, act immediately — the sooner you dispute, the less damage it does. Check our guide on medical debt forgiveness programs for additional options if you’re overwhelmed by bills.
Key takeaway
You have 12 months before unpaid medical debt can even appear on your credit report. Use that time to dispute billing errors, apply for financial assistance, and negotiate. Most medical debt that ends up on credit reports could have been resolved during this window.
Frequently asked questions
Is medical debt still reported on credit reports in 2026?
It depends on the amount and status. The three major credit bureaus voluntarily exclude paid medical collections, unpaid medical debt under $500, and any medical debt less than 12 months old. Unpaid debt over $500 that is more than 12 months old can still appear on your report unless your state has passed a law banning it. The CFPB’s federal ban was struck down in July 2025, so there is no blanket federal prohibition.
What happened to the CFPB rule banning medical debt from credit reports?
The CFPB finalized the rule in January 2025, but a federal court struck it down in July 2025 in AHA v. CFPB. The court ruled the CFPB exceeded its authority. The Trump administration’s CFPB did not appeal and instead argued the decision should preempt state-level protections — an argument state attorneys general have rejected. As of February 2026, the rule is not in effect.
Does my state protect me from medical debt on my credit report?
At least 10 states have enacted laws restricting medical debt credit reporting beyond federal rules: California, New York, Washington, and Minnesota ban it entirely; Colorado and Nevada protect debts under $2,500; Connecticut protects debts under $1,000; Illinois and Oregon protect patients under 400% of the Federal Poverty Level; and Maryland restricts collection actions on lower-income patients. See the full state table in Section 3 of this guide.
How much does medical debt lower my credit score?
CFPB research found an average drop of 22 points. The actual impact depends on your overall credit profile and which scoring model is used. Under FICO 9 and VantageScore 4.0, paid medical collections are ignored. Under FICO 8 (still common for mortgages), medical collections carry nearly the same weight as other collections. Those 22 points can mean the difference between mortgage rate tiers, costing $20,000–$40,000 over a 30-year loan.
How do I remove medical debt from my credit report?
Start by checking whether the debt qualifies for automatic exclusion (paid, under $500, or less than 12 months old). If it should already be gone, file a dispute with each bureau showing the entry. For valid debts over $500, consider a pay-for-delete negotiation or simply paying the debt (paid medical collections are automatically removed under bureau policy). If your state bans medical debt reporting, cite the specific statute in your dispute.
Should I pay a medical collection to get it off my credit report?
Under current bureau rules, paying a medical collection triggers its removal. Under FICO 9 and VantageScore 4.0, it’s ignored once paid. But before paying, verify the bill is accurate — upload it to BillKarma to check for errors. If the original charges were wrong, you may owe less. Also check whether the debt qualifies for removal without payment (under $500, less than 12 months old, or protected by state law).
Sources
- CFPB — Final Rule to Remove Medical Debt from Credit Reports (January 2025)
- CFPB — Medical Debt Burden in the United States (Research Report)
- Equifax, Experian, TransUnion — Joint Announcement on Medical Collection Reporting Changes (2022)
- AnnualCreditReport.com — Free Weekly Credit Reports
- myFICO — FICO Score Versions and How They Treat Medical Debt
- FTC — Fair Credit Reporting Act (FCRA) Full Text
- FTC — Fair Debt Collection Practices Act (FDCPA) Full Text
- Colorado HB 22-1285 — Medical Debt Collection Protections
- New York Medical Debt Protection Act (2025)
- KFF — The Burden of Medical Debt in the United States