Can Medical Bills Affect Your Credit Score? What Families Need to Know in 2025

Introduction

Unexpected medical bills can be a major financial stressor, especially for busy parents balancing work, childcare, and household expenses. Whether it’s an emergency room visit, an unexpected procedure, or ongoing treatment for a child, medical costs can quickly pile up.

But here’s the big question: Can medical bills affect your credit score? The short answer is yes—but recent changes in medical debt reporting are making it easier for families to protect their credit.

In this guide, we’ll break down how medical bills impact your credit report, the 2025 changes to medical debt reporting, and practical steps you can take to protect your family’s financial future.

How Medical Bills Appear on Credit Reports

Medical debt doesn’t show up on your credit report the same way a credit card or loan does. It follows a different process that can take months—or even years—before it affects your credit score.

The Journey from Hospital to Credit Bureau

You receive medical treatment → A hospital, doctor’s office, or urgent care center provides services.

The provider bills your insurance → This step can take weeks or months.

You’re billed for any remaining balance → After insurance processes the claim, you receive a bill for any unpaid portion.

The provider may send unpaid bills to collections → If you don’t pay the balance within a set period (usually 90 to 180 days), the provider may send it to a collection agency.

Collections agencies report to credit bureaus → At this stage, medical debt may appear on your credit report and start affecting your score.

Time Before Reporting Begins

The good news? Unlike missed credit card or loan payments, medical debt doesn’t impact your credit score right away. There’s typically a one-year waiting period before unpaid medical bills in collections appear on your credit report. This grace period gives families time to:

✅ Work with insurance to resolve billing issues

✅ Set up payment plans with medical providers

✅ Negotiate lower bills

Different Types of Medical Debt

Not all medical debts are treated equally. Here’s how different types can impact your credit:

Bills under $500 → No longer reported on credit reports (as of 2023).

Bills sent to collections but paid later → Removed from credit reports (thanks to recent policy changes).

Large unpaid medical bills ($500+) → Can still hurt your credit if they remain unpaid after the grace period.

Medical credit cards & personal loans → These do impact your credit immediately since they function like regular loans.

Recent Changes in Medical Debt Reporting

The 2025 CFPB Rule Explained

In 2025, the Consumer Financial Protection Bureau (CFPB) is implementing a new rule that removes medical debt from credit reports entirely. This is a huge win for families, as it means:

🚫 Unpaid medical bills won’t lower your credit score

🚫 Medical debt in collections won’t show up on credit reports

🚫 Lenders can’t use medical debt to deny mortgages, auto loans, or credit cards

The CFPB’s reasoning? Medical debt doesn’t accurately reflect financial responsibility. Many families receive surprise bills, face insurance disputes, or struggle with unaffordable healthcare costs—issues that don’t mean they’re irresponsible with money.

Impact on Your Credit Score

For families struggling with medical debt, the 2025 rule will bring immediate relief:

If you have existing medical debt on your report, it will be removed.

If a new medical bill goes to collections, it won’t appear on your credit.

Other debts (credit cards, loans, mortgages) will still impact your score, so responsible financial management remains crucial.

When Medical Bills Can Still Hurt Your Credit

Even with these positive changes, some medical-related debts can still affect your credit score. Here’s what parents need to watch out for:

Medical Credit Cards and Personal Loans

Hospitals and dental offices often offer medical credit cards like CareCredit or recommend personal loans to cover expenses. These function like any other credit line—meaning missed payments will hurt your credit score.

Key takeaway: Avoid medical credit cards unless absolutely necessary, and explore interest-free payment plans directly with providers first.

Large Medical Debts Over $500

Although the CFPB rule eliminates medical debt from credit reports, large unpaid bills can still create financial problems. Providers or collection agencies may:

⚠️ Take legal action (leading to wage garnishment or liens)

⚠️ Send unpaid bills to debt buyers who pursue aggressive collection tactics

⚠️ Sell your debt to companies that report it under different categories (e.g., unpaid personal loans)

Non-Medical Payment Methods

If you pay for medical expenses with:

A credit card → Missed payments will affect your credit.

A personal loan → Late or missed payments will impact your credit score.

Solution? Always ask about zero-interest payment plans before using a credit card or loan.

Steps to Protect Your Credit Score

Even though medical debt won’t appear on credit reports after 2025, taking proactive steps can prevent stress and financial hardship.

1. Review Medical Bills for Errors

Did you know that 80% of medical bills contain errors? Always:

✅ Request an itemized bill to check for duplicate charges or incorrect fees.

✅ Compare the bill with your insurance explanation of benefits (EOB).

✅ Call the provider to dispute any mistakes.

2. Work with Insurance Companies

Insurance claims can be delayed, denied, or miscalculated. To avoid unfair charges:

📞 Call your insurance provider to clarify coverage details.

📨 Submit an appeal if a claim was denied incorrectly.

🤝 Ask the hospital if they offer charity care or financial assistance programs.

3. Set Up a Payment Plan

Most hospitals and doctors’ offices offer interest-free payment plans. Before agreeing to one:

🔹 Ask for written confirmation of the terms.

🔹 Ensure the payments fit your budget.

🔹 Avoid plans that charge high interest rates.

Pro Tip: If a provider doesn’t offer a plan, consider using a 0% APR credit card (if you can pay it off before interest kicks in).

Conclusion

For parents already juggling work, childcare, and financial responsibilities, medical bills shouldn’t be another burden on their credit score. Thankfully, with the 2025 CFPB rule, families no longer have to worry about medical debt appearing on credit reports.

However, medical-related debts like credit cards, personal loans, and unpaid large bills can still create financial stress. That’s why it’s crucial to:

✅ Check medical bills for errors before paying.

✅ Work with insurance to ensure claims are processed correctly.

✅ Set up payment plans before resorting to credit cards or loans.

By staying informed and taking proactive steps, you can protect your family’s financial future while focusing on what truly matters—your health and well-being. 💙

FAQs

🔹 Can medical bills affect your credit score in 2025?

No, thanks to the CFPB’s new rule, medical debt will no longer be reported to credit bureaus.

🔹 What if I used a medical credit card?

Medical credit cards function like regular credit cards, so missed payments will affect your credit.

🔹 How long can unpaid medical bills affect your credit score?

Under the new rule, they won’t impact your score—but unpaid debts can still lead to lawsuits or collections.

🔹 Should I pay off medical debt with a credit card?

Only if you can pay it off immediately. Otherwise, interest charges can make the debt much worse.

Want more family-focused financial tips? Visit BraveHeartsFamilies.org for expert advice! 🚀