How Do Medical Bills Affect Your Credit Score? Tips To Help You Cope

past due medical bills showing how do medical bills affect your credit score

How Do Medical Bills Affect Your Credit Score

Trying to finance an auto loan or get a new mortgage and you’re just finding out that you have delinquent unpaid medical bills on your credit report.  One question that should immediately come to mind is how do medical bills affect your credit score and how do I get them removed?  In addition, you might also consider questions like do medical bills affect your credit when buying a house, car or obtaining a student loan.

cute depressed dog

If you’re one of the 43 million people with debt from unpaid medical bills on your credit report you’re not alone.

Unlike credit card debt, medical bills are tough to easily avoid. Furthermore, if an illness, disease, or emergency happens, there’s not much of a choice. People from all walks of life have trouble with medical bills — uninsured and insured alike.

If you’re concerned about how do medical bills affect your credit score, there is hope. By creating an action plan, you can find yourself working out of medical debt. In fact, it may not be as difficult as you think.

But first, some great news.

FICO Changes and Your Credit Score

FICO (Fair Isaac Corporation) is the credit scoring service that’s the cumulative average from the 3 different credit bureaus — TransUnion, Experian, and Equifax.

For most consumers their biggest question is how long do unpaid medical bills stay on your credit report and how does it impact my credit score.  To answer that you need to understand is how FICO applies their medical debt collection rules and how they follow unpaid medical bill collections laws.

Back in 2015, FICO made some changes to their policies. The changes affected the reporting of medical bill debt to your credit score.

  • Unpaid bills stay unreported by the credit bureaus for 6 months
  • Credit bureaus do not report unpaid bills less than $100
  • Credit agencies will remove unpaid medical bills from your credit report that you do pay

That’s good news for people who recently found themselves dealing with the inability to pay off medical debt. Also for people with bills that just went into collections.

painter painting change on a wall

How Does Medical Debt Affect Your Score?

In addition to the changes mentioned above, you should be aware that you have different types of credit scores and all affected differently depending on the credit scoring model.  The new FICO 9 score disregards paid collections accounts.  In addition, medical collection accounts are weighted less under the new model.

Under the FICO 8 model the most frequently used by lenders, looks at all small medical bill collection accounts if the original balance is over $100 dollars.

The Vantage Score 4.0 separates medical bill collections for other forms of collection accounts, weighting medical bill collections less than other forms of collection accounts. Vantage Score 4.0 also ignores medical bill collections aged less than 6 months.

Although FICO 9 and Vantage Score 4.0 can make life a little bit better, most lenders use older types of credit scores that don’t give medical debt any kind of preferential treatment. As a result, expect that if you find a medical debt collection on your credit report it will be adversely viewed when applying for credit.

Watch This Money Sense Video About Unpaid Medical Bills

In the end, medical debt can impact you credit score, some scores more than others. Even more so if your lender uses older credit scoring methods.

If you’re past that point and have unpaid bills on your report, there are steps you can take. To completely understand how do medical bills affect your credit score, follow this guide to set in motion a plan to repair your credit.

medical credit information on lap top

Step 1: Check Your Report

When’s the last time you requested a copy of a credit report for yourself?

Perhaps you applied for a loan not too long ago and were told your score. Knowing your score isn’t enough.

It’s important to know which of your unpaid bills were reported to the credit agencies. It’s possible some bills haven’t posted yet (due to the FICO changes mentioned above). That’s good news and gives you a starting point for what bills to tackle first.

Step 2: Review Your Bills

Check current and past bills for mistakes. It’s not uncommon to find errors for items like:

  • Duplicate charges
  • Charges for services not received
  • Duplicate medications
  • Charges for procedures not received or canceled
  • Unperformed lab tests

If you find an error, contact the company right away. They will assist you on how to delete medical collections from your credit report.  If you still can’t get the problem resolved, consider disputing medical bills on your credit report.  You can do this by finding a sample letter to dispute unpaid medical bills on your credit report.  Be patient, sometimes it takes a while for things to get corrected.

stamped quality control

Step 3: Don’t Ignore Your Bills

Don’t throw up your hands in defeat believing things are a lost cause. Contact the hospitals, doctor’s office, your health insurance company, or collection agency to discuss a payment schedule. Much to your surprise — especially an unpaid medical bill with a collection agency — how willing they are to negotiate a reduction in the total payoff.

If they know you’re making a valid attempt to pay the debt, they’re often much more willing to work with you.

Step 4: Make the Payments

Start with the bills with the smallest amounts first. One good thing about unpaid bills is that it’s not the standard practice to charge interest or late fees.


Now that we have answered the question, how do medical bills affect your credit score, it’s time to take action. Establish a plan. Especially if you’re younger, or just beginning to work on establishing your credit.

Having negative marks on your credit report hurts your future financial status. In fact, you may be wondering will medical collections prevent me from buying a home and do medical bills affect your debt to income ratio.

house and realtor

Unpaid medical bills do affect your debt to income ratio (DTI) ratio when arranging financing to buy a home.  Loan originators use this calculation to determine if you can take on future mortgage payments.   When calculating your back end DTI (recommended cap is 36%) lenders will consider medical debt expecting to last 10 months or longer.

At a minimum, unpaid bills will or at least make it more difficult to qualify for home or auto loans, a line of credit, and may even result in higher auto insurance rates. In many cases, credit card companies determine your APR based on your credit score.

Have additional questions about how do medical bills affect your credit score or other credit issues? Please contact us or read our article on Improving Your Credit.

Taking control of your credit, your personal finances, and your future is important. Subscribe to our newsletter to keep informed on critical issues and helpful tools.

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  1. Honestly, I never thought such a thing could affect credit in the long run like this. But then again, nothing these days seems implausible.

    I am glad that you answered the question towards the end because I was beginning to feel sorry for lots of folks I know.

    And you are perfectly right. It is all about establishing a plan and following through.

    I will surely bookmark this post and I will also keep watch on your next post.

    • Most people are not aware until a medical emergency happens and the bills start rolling in.  The trick is not to ignore them.

      If you do, they will be sent to collections and you will have to work with a collection agency to straighten things out.  Even worse it can do tremendous damage to your credit score.

      The best thing to do is work with the hospital or doctors office and come up with a payment plan. Make the payments as quickly as possible and stick to the plan.

      Most importantly, review your bills and make sure the charges are correct.  Sometimes you need to be persistent as the hospital is not always forthcoming with billing details.

      Having unpaid medical bills on your credit report will limit your ability to finance a home, car or student loan.  Some of the most important things we need in life.

      Thanks for you comments.

  2. Very informative!

    In my former life, I was a mortgage broker and if there was a collection on someone’s account, 99% of the time it was medical.

    Your recommendation to stay on top of the bills when a medical event takes place is the key. I think too often we (the consumer) just assume that insurance is taking care of it. 

    I had a surgery last year and was stunned at the amount of paperwork from both the medical and insurance companies. 

    Fortunately because of my experience in reviewing so many other people’s credit reports over the years; I was relentless on staying on top of it. I even built a spreadsheet to track it all! 

    What do you think about paying off an old collection and the impact on one’s credit score? I’ve seen that a recently paid off collection can “reactivate” the negative piece of having a collection on your credit report?

    • Hi Leissa,

      Awesome to hear you found the article informative. Very impressive keeping a spreadsheet to track it all!

      I agree, most consumers think insurance is taking care of the bills when in fact it’s up to us.  Understand your deductible and maximum out of pocket expense, so you can plan for any medical issue that may arise.

      I also recently had some surgery and it’s quite shocking when you receive the bill and the hospital demands final payment. I worked out a payment plan with them, but they still kept calling.

      While it is probably true that a paid off collection can reactivate, I think the rules are changing and over time that will disappear. 

      The new FICO 9 score doesn’t consider collections less than 6 months old and ignores old paid off collections.

      Unfortunately most creditors are still using the old FICO 8 score, so consumers will still have to struggle until FICO 9 is fully adopted.

  3. Very informative post on how medical bills affect your credit score.

    I’ve been in good health so far (knock on wood). It has always amazed me how much it can impact ones financial situation.

    I have experience in this field in that I worked for a major Health Insurance company until I retired. Many patients have shared their medical bill struggles with me, so I can sympathize with their dilemma.

    I have saved your site to refer back to. So much very good information on it.

    Keep up the great work, I look forward to future posts.

    • Happy to hear you found the post informative.

      Medical bills can be a disaster to your financial situation.

      Lots of folks I talk to say that past unpaid or delinquent medical bills are affecting there credit report and in turn impacting their credit score.

      High deductibles and maximum out of pocket expenses can put a big dent in your medical budget.  Most people need more time to pay.

      With the new FICO 9 score out and with some lenders adopting it, should help consumers get their medical bills in order before it has a negative impact on their credit score.

      Until full adoption happens, work with your doctor or hospital to make arrangements to pay your medical bills  and do everything you can to avoid having them reported to collections.

  4. Hello Patrick!

    We had a recent episode in my family where we aquired some steap medical expenses. 

    I’ve been trying to work to accumulate money to pay them, but I should probably call to keep the communication open with the collectors. As you said, they may work with me.

    It’s so difficult to plan for medical events because even if you have insurance (like we do), the hospitals still have the ability to charge you at such wide ranges. It’s ridiculous!

    Thanks for the information here.

    • Hi Tiffany,

      We had the same episode in our family and there are many families in the same situation.

      Medical expenses are too high with deductibles that really don’t make sense.  You can try to save, but it’s best to get on a payment plan to keep the bill collectors away.

      If you don’t address your medical bills, they can have a huge affect on your credit score.

      I’m a big proponent of Health Savings Accounts (HSA’s) particularly for growing families and young singles just starting out.

      HSA’s are beginning to catch on and have lots of great features that make medical planning more manageable.

      Have a look by clicking on the link above.  You may be surprised at what you find.

      All the best.

  5. This is good information. I have only had my credit score checked once.

    I’ve been very lucky. I haven’t had to go to a doctor in about 10 years. I don’t trust the medical system much. There is a lot of room for error because the people who actually perform the services (nurses, doctors) are not the ones who actually do the billing.

    I also think they over charge. A large percentage of medical bills are the salaries of the medical staff including hospital managers. The actual syringes, needles, gauze pads, etc. are pretty cheap.

    • Hi Jo,

      Congratulations on not having to go to a doctor for 10 years.  Most people are not that lucky and when they need medical treatment, it can get very expensive.

      Once the hospital bill collectors start calling, it starts to sink in.  How am I going to pay for this?  If you can’t, then those unpaid medical bills are going to affect your credit score.

      I would agree with you there is waste in the system and those performing the services are not the ones who assign the costs.  The way the system is set up now, it’s profit based. So, doctors, hospitals and insurance companies have to show a return.

      That is why it is important to know what you are required to pay before you visit a doctor or enter the hospital for treatment.

      One should always understand what their deductibles, co-pays and out of pocket maximums are.  This way one can plan ahead of time. It’s extremely important to make payment arrangements before hand to avoid damaging your credit score.


  6. Several months ago my son fell out of a window from the second floor.
    Yes, I know, we failed to keep it safe..
    Luckily, he only got a scratch on his chin and few bruises. But some “nice” guy decided to call 911 to “help”. They sent 3 firefighters trucks, police and 2 ambulances. My husband was forced to get into the ambulance. They spent 4-5 hours in ER, did XRay and a doctor put some glue on the boy’s chin.
    Well, soon we got about 16k bill. We have an insurance, it reduced 6K, paid another 6k and left us with 4k.
    But we felt it’s a ridiculous amount for the service provided. We started to ask how it is calculated. After a month waiting for the itemized bill, we found out that we were charged 12K BEFORE that ambulance even reached the hospital, as Trauma Level2 code was activated. The hospital called us many times, but we were asking for details. For now, it ended up with our request to see any documentation for the reason this code was activated (my guess is because the second floor is more than 2-3 times of kid’s height). They stopped calling for now.
    We are waiting to see how it will end.
    During this time I asked that question – how it might affect my credit score? First, I thought medical is not included, but then found that it is, so we took it seriously. Try to stay in touch with billing, ask them for all possible information and documentation. If they miss something, maybe you’ll be off the hook (fingers crossed)

    • Wow! So glad to hear your son is okay. Unpaid medical bills do affect your credit score, but there have been some recent changes. Some scores (Vantage) will weight medical bills less and the new FICO 9 score disregards paid medical bills. Either way, if you have unpaid medical bills it will impact your score negatively. Looks to me like you are being proactive and keeping an eye on things. Doing that is a very smart approach.

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