Quick summary

Medical collections are unpaid or overdue medical bills that a provider or insurer has assigned to a collection agency. In July 2022 the three major credit reporting companies—Equifax, Experian and TransUnion—announced changes intended to reduce the negative credit impact of medical debt: they extended the time before medical bills can appear on reports (from about 180 days to 365 days), removed small medical collections from consumer reports, and excluded paid medical collections from score calculations (see CFPB summary). These steps help many consumers avoid large, immediate score drops, but they do not erase obligations or replace careful bill management.

Sources and further reading: Consumer Financial Protection Bureau (CFPB) explanation of medical debt reporting and the Federal Trade Commission (FTC) guidance on credit reports and disputes (consumerfinance.gov; ftc.gov).

Why medical collections are treated differently

Medical bills are often episodic, unexpected and involve third‑party insurers. That makes them different from credit card or personal loan delinquencies:

  • Timing mismatch: insurance claim adjudication or provider billing errors can generate delays that trigger collections even though a consumer disputes responsibility.
  • Unpredictability: acute illnesses and emergencies often cause charges that consumers did not budget for.
  • Evidence complexity: insurance payments, denials and billing codes can confuse collectors and consumers alike.

Because of those factors, regulators and the credit bureaus recognized medical collections can be poor indicators of credit risk and made targeted reporting changes.

What changed (clear, practical points)

Key changes announced by the major credit bureaus in 2022 — and still in effect as of 2025 — include:

  • Longer waiting period before reporting: bureaus now generally allow 365 days (one year) after the initial bill before a medical debt can appear on a credit report. This gives more time for insurance processing and billing disputes.
  • Small-dollar collection removal: the bureaus removed most medical collections below a specified threshold from consumer reports. This cut down noise and prevented very small unpaid medical balances from dragging down credit.
  • Paid medical collections excluded from scoring: if a medical collection appears on your report but the account is paid or settled, that collection will not be used in most major credit scoring models.

These updates were publicized by the bureaus and summarized by the CFPB; for the official bureau statements, see Equifax, Experian and TransUnion press pages and CFPB analysis (consumerfinance.gov).

Note: Under the Fair Credit Reporting Act (FCRA), collection entries generally may remain on a credit report for up to seven years from the original delinquency date. The bureaus’ changes affect whether an entry appears or whether it is factored into a score, not the FCRA maximum reporting window.

How this affects your credit score and lending chances

  • Fewer people will see immediate score damage from small or disputed medical bills.
  • Paying a medical collection is no longer guaranteed to increase your score immediately, but removing the scoring impact of paid medical collections reduces long-term harm.
  • Lenders still see collection entries on reports even if they don’t always affect score calculations; underwriters may manually review files, so outstanding medical collections can influence mortgage or loan decisions.

In my practice I’ve seen clients move from denial to approval for mortgage underwriting after resolving or documenting medical debts—even when scores changed only modestly—because lenders reviewed account notes and insurance documentation.

Practical steps to protect your credit after a medical bill

  1. Review bills promptly. Compare provider statements to your Explanation of Benefits (EOB) from the insurer. Errors and duplicate charges are common.
  2. Track insurance claims. Contact your insurer if payments are delayed or denied. Ask the provider to hold off on collections while you appeal denials.
  3. Ask for an itemized bill. That helps identify coding errors or services you never received.
  4. Negotiate with the provider or collector. Many hospitals and practices offer income-based assistance, sliding-scale discounts, or interest-free payment plans. See our guide on Medical-Collection Negotiation Strategies to Protect Your Credit.
  5. Get validation from collectors. Under the Fair Debt Collection Practices Act (FDCPA) you can request debt validation in writing. If the collector can’t prove the debt, dispute it with the bureaus.
  6. Dispute inaccurate entries. Use AnnualCreditReport.com or the bureaus’ dispute portals to file documentation (see FTC guidance at ftc.gov).
  7. Document everything. Save EOBs, bills, letters, payment receipts and notes from phone calls.

Step-by-step: disputing a medical collection on your credit report

  1. Obtain your free reports: AnnualCreditReport.com gives annual access to Equifax, Experian and TransUnion reports (FTC).
  2. Identify the collection entry and gather supporting documents: provider bills, proof of insurance payments or statements showing a zero balance.
  3. File a dispute with the bureau listing the item. Each bureau provides online portals and phone/mail options.
  4. Send supporting documents and a short cover letter explaining the error or your reason for dispute.
  5. Follow up. Bureaus typically investigate within 30 days. If they don’t remove or correct the entry, you can file a complaint with the CFPB (consumerfinance.gov) and consider a direct dispute with the data furnisher (the hospital or collections company).

For deeper tactics to dispute and remove medical debt from reports, see our article on Medical Debt on Credit Reports: Disputes and Removal Strategies.

Negotiation tactics that work

  • Ask for an itemized reconciliation and highlight payments from insurance.
  • Request a “pay-for-delete” only in writing; note that not all collectors will agree, and credit bureaus discourage linking payments to removal guarantees. Nevertheless, some collectors will accept a lump-sum settlement in exchange for removal.
  • Propose a reasonable hardship plan or income-adjusted discount—many hospitals have financial assistance programs required under federal rules for non-profit hospitals.

For scripts, sample letters and negotiation templates, consult our practical guide on negotiating medical collections: Medical-Collection Negotiation Strategies to Protect Your Credit.

Common misconceptions (clarified)

  • “Medical collections are gone forever if paid.” Not exactly. Paid medical collections are often excluded from scoring, but the collection record can still appear on your report unless the furnisher or bureau removes it.
  • “All medical debts are forgiven by these changes.” No. These rules change reporting and scoring practices; they don’t erase debts or stop collectors from pursuing payments or legal action in some cases.
  • “Disputing a debt is the same as avoiding payment.” Disputes protect you from inaccurate reporting; if you legitimately owe the debt, negotiate affordable repayment rather than ignore it.

Real-world example

Nancy, a client I worked with, had an emergency surgery and a $3,200 balance that her insurer initially denied. The provider sent the account to collections after six months. Because the law and bureau practices now provide a one‑year window, Nancy had time to appeal the insurer’s denial. She also negotiated a discounted payment plan once the insurer approved a portion. The collection never affected her score because the account was resolved and documented before being furnished to the bureaus.

When to get professional help

  • If a collector sues you. Legal defense or negotiation by an attorney may be necessary.
  • If you have multiple medical collections affecting mortgage underwriting or employment-related background checks.
  • If you need help organizing documentation for complex insurance appeals.

Consider a licensed consumer credit counselor, housing counselor or attorney for serious disputes. I recommend checking credentials and looking for nonprofit counseling via HUD‑approved agencies when possible.

What to watch for going forward

  • Bureau policy reviews and CFPB rulemaking could further change how medical debt appears on reports; keep an eye on consumerfinance.gov for updates.
  • New scoring models or lender overlays may treat medical collections differently; always ask prospective lenders how they evaluate medical debt during underwriting.

Bottom line

Recent credit bureau changes reduce the immediate credit damage from medical collections but do not erase the balance you owe or replace careful bill management. Act quickly: verify bills, track insurance, negotiate with providers, and dispute errors promptly. For tactical negotiation and dispute templates, see our internal guides: How Medical Collections Are Reported and What You Can Do and Medical-Collection Negotiation Strategies to Protect Your Credit.

Professional disclaimer: This article is for educational purposes only and does not constitute legal, tax or financial advice. For advice tailored to your situation, consult a qualified professional.

Authoritative sources: Consumer Financial Protection Bureau (consumerfinance.gov); Federal Trade Commission (ftc.gov); public statements from Equifax, Experian and TransUnion (respective corporate websites).