Medical debt is the leading cause of bankruptcy in America, but recent regulatory changes have significantly changed how it affects your credit. Understanding these changes can help you prioritize which debts to tackle and which can wait.
What Changed
As of 2025, the three major credit bureaus no longer report medical debt that has been paid or is under $500. Additionally, medical debt in collections now has a 365-day waiting period before it can appear on your credit report — giving you a full year to resolve the bill before it affects your credit. These changes removed billions of dollars in medical debt from consumer credit reports. However, the debt itself still exists and collectors can still pursue payment.
What Has Not Changed
Medical debt over $500 that remains unpaid for more than a year can still appear on your credit report and impact your score. Medical providers can still sue you for unpaid bills, and a court judgment will appear on your credit report regardless of these rules. Additionally, if you paid a medical bill with a credit card, it becomes credit card debt — not medical debt — and is not protected by these rules. Never pay medical bills with credit cards if you can avoid it.
How to Handle Medical Debt
First, always ask for an itemized bill. Billing errors are common and you may find duplicate charges or services you never received. Second, negotiate. Many hospitals offer income-based financial assistance or sliding-scale discounts — but you have to ask. Third, request a payment plan directly with the provider before the debt goes to collections. Medical providers generally prefer payment plans over selling the debt to collectors for pennies on the dollar. Fourth, if the debt is already in collections, you can still negotiate a settlement — often for less than the full amount.