Some Medical Debt No Longer Counted in Credit Score

As of July 1st, the credit bureaus are no longer counting some large medical debt in their credit reports, and small medical debts won’t be reported at all in 2023. Such credit reports are most often sent to creditors, banks, landlords, and judges. With the new rule in place, companies will now give a year to pay off the debt once it has been sent to collections before they report it. Previously, this period was just 6 months. In addition, medical debt under $500 won’t be counted against your credit score. This change affects about 70% of consumer medical debt.

Although this is a step in the right direction, many question why medical debt is on the credit reports at all. Amanda Dunker of the Community Service Society of New York said it best, “These aren’t people who bought shoes they couldn’t afford… They went to a doctor because they were sick or needed help with an injury.”

It is the federal organization, the Consumer Financial Protection Bureau (CFPB), whose research showed that credit cards and mortgages are the best indicators of whether someone will pay their medical debt, and they are working to determine if such debt should be on the reports at all.