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Medical Bills and their Impact on Your Credit

medical debt

With the incorporation of the Affordable Care Act, the staggering costs of medical bills have been widely discussed in the past few years. What isn’t discussed as frequently however, is the impact that this debt could have on your credit score should they go unpaid. This is especially important to address when you consider the following statistics:

  1. 79 million Americans have medical collections on their credit report.
  2. Over the past decade, medical expenses have increased 33%.
  3. A study found that 66.5% of all bankruptcies were tied to medical issues.

How does medical debt impact my credit score?

So, how exactly do unpaid medical bills impact your credit, and what can you do to prevent this from occurring?

A key point to remember is that medical bills only affect your credit when they are sent to collections. Unlike financial institutions, doctors’ offices don’t have direct relationships with credit bureaus, so your payment history is not reported, just a lack of payment is. When unpaid, these bills will go to a collector, and will negatively impact your credit score.

Currently, medical collections are not weighed differently from other types of collection activity, and they can take up to seven years to drop off your credit report, even if you have paid the collector. For more information on what a credit score is and how it’s calculated, click here. 

How can I remove medical debt from my credit report?

If the debt reported is accurate, unfortunately there is not much that you can do to remove it from your credit report. It is important to continue to establish good payment habits on your other debts, so your credit score is not impacted further.

If the debt reported is inaccurate, there are a few steps you can take:

  1. Gather any documentation you have substantiating that the payment has been made (payment records, receipts, etc.)
  2. Send written notice to the specific bureau or bureaus which have reported your medical debt and include your documentation.
  3. Since the Fair Credit Reporting Act requires bureaus to investigate disputes, they must follow up with your claim. Remember to follow up with the bureaus until you see that the reporting error has been removed.


The best way to prevent medical bills from negatively impacting your credit is to pay your bills on time, and if you can’t, try and make arrangements that are more agreeable BEFORE the bill is sent to collections. It is also important to follow up with your medical insurance provider to make certain there are no misunderstandings that the bill has been paid in full. Due to the complex nature of insurance plans, sometimes consumers have bills sent to collections that they assumed their insurance carrier covered.

How is the impact of medical debt changing with the onset of FICO 9?

As you may have heard, recently FICO, the most widely-used credit score, revised its scoring model so the impact of medical collections on a credit report weighs less than other collections. The reason is because unlike other types of debts, many consumers don’t willingly choose to enter into these debts.  Medical bills are often unplanned and yield a very high amount of payment due in a much shorter time. In addition to decreasing the weight medical debt has on a score, FICO 9 also removes collection activity once the debt has been settled. Once in place, the revised score is predicted to raise credit scores impacted by medical debt an average of 25 points. For more information on how to improve your credit score, click here. 

However, don’t be quick to assume this will immediately boost your score. FICO is an independent company, and it is not required that lenders implement the new model; in fact, some haven’t even implemented recently revised models preceding FICO 9.  Again, the best way to ensure your credit report is in good standing is to pay, or make arrangements to pay, these bills before they move to collections.

Are you struggling with medical bills? Mariner Finance can help. We can work with you to find loan options that break your medical bills into smaller, more affordable monthly payments so they don’t go to collections. Call your local branch today to see if we may be able to help you!

The information provided in this article does not constitute financial advice and is provided for educational purposes only without any express or implied warranty of any kind. This article is not intended as legal, tax, investment, or any other advice, and Mariner Finance does not offer credit repair services. Consider talking with an appropriate qualified professional for specific advice. Blog posts are for informational purposes only.