Your credit score may see a boost, thanks to changes around medical debt. What to know

·2 min read
Jenny Kane/AP

The nation’s three largest credit reporting bureaus are changing the way they report medical debt, signaling a credit score boost for some consumers.

Starting July 1, firms Experian, Equifax and TransUnion will omit medical debt that went to collections from credit reports once it has been paid, according to a news release. The changes, first announced in March, stand to wipe nearly 70% of medical debt from people’s credit reports.

Previously, such debt could appear on a person’s file for up to seven years.

“We are dedicated to fostering the economic health of individuals and communities,” Mark W. Begor, CEO Equifax; Brian Cassin, CEO Experian; and Chris Cartwright, CEO TransUnion, said in a joint statement. “Unexpected expenses, such as the cost of an unplanned medical visit, can be a hardship for many families.”

Additionally, consumers will have a longer period of time to pay down their debt. They now have one year, up from six months, before unpaid medical collections debt shows up on their credit report, the bureaus said. Medical debts “with an initial reported balance of less than $500” also will disappear from reports, starting in 2023.

“These changes will realign our approach to medical collection debt reporting in a manner that is designed to help consumers focus on their personal well-being,” the CEOs concluded.

The agencies’ updated reporting is a welcome change for consumers amid soaring inflation, interest rates and pricing. In June, the Federal Reserve hiked rates three-quarters of a percent, boosting the cost of borrowing for a car, home or other loan.

Wiping out medical debt stands to improve the credit scores of millions of consumers and puts them in a better position to borrow.

“It’s a wonderful move for consumers and long overdue,” Jeff Smedsrud, co-founder of, told CNBC.

Credit expert and investor Jasmine “Jazzy Mac” McCall echoed this sentiment, telling Forbes that medical debt is often an unforeseen financial burden and “is not a true reflection of a person’s willingness or their ability to pay back a debt.”

About 1 in 10 U.S. adults owe at least $250 in medical debt, and millions owe more than $10,000, according to a recent Kaiser Family Foundation analysis. In 2019 alone, Americans’ medical debt totaled an estimated $195 billion.

The report, based on results from the 2020 Survey of Income and Program Participation, found that Black adults, middle-age adults and those in poor health were more likely to have significant medical debt than others. The same was true for adults without medical insurance.

U.S. Census Bureau data also shows about 19% of U.S. households couldn’t afford to pay for medical costs up front in 2017.

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