Do medical bills affect your credit? 5 things to know

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What happens if medical bills go to collections?

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Unforeseen health problems and medical emergencies can happen to anyone at any time. And if an emergency strikes close to home, perhaps the last thing on your mind is how your credit score will hold up.

The good news—or at least the silver lining—is that medical debt can get special treatment during the debt collection process, and its impact on your credit score may be minimized because of the nature of the debt.

Here are answers to a few frequently asked questions about medical bills and their impact on your credit.

The first thing to understand is how medical debt is treated during debt collection. You may benefit from a long repayment timeline and grace periods that extend beyond due dates, but if you don’t begin repayment, then the debt collection process will eventually begin.

Although debt collection is an ordeal that’s best entirely avoided, you may be able to negotiate more favorable terms with creditors and debt collectors for medical debt. Especially if you can afford a lump-sum payment, you may benefit from creditors’ interests in being patient friendly.

Medical debt isn’t explicitly called out in the Fair Debt Collection Practices Act (a 1977 law most recently updated in 2010), but it is fully covered by the act as a type of consumer debt.

The short answer is yes—medical debt can affect your credit score. But it’s not all bad news:

You’re dealing with a surprise medical bill if you receive an unexpected notice requesting money after a medical procedure. You may have been involved in a car crash and had no choice but to get care at the closest hospital, or inadvertently used the services of an out-of-network provider during a planned surgery.

Surprise medical bills can negatively affect your credit much like any other medical debt. If you’re blindsided by a bill, you may not be prepared—mentally or financially—to pay it by the due date. Your best course of action is to first ensure that the bill was not issued in error, and then take proactive steps to resolve the debt before the collection process can begin. (And make sure the bill is in line with protections afforded by the No Surprises Act—see below.) Surprise medical bills are never pleasant, but they don’t impact your credit score until they appear in your credit history.

In 2020 the U.S. Congress passed the No Surprises Act with the goal of helping individuals cope with unexpected medical expenses. The No Surprises Act is designed to assist you with avoiding medical debt, especially related to emergencies and out-of-network care, by limiting the cost of out-of-network care to amounts comparable to in-network treatment.

The No Surprises Act also protects individuals by requiring health care providers to give reasonably accurate cost estimates to anyone receiving treatment without insurance. You’re entitled to get a “good faith” estimate before the treatment occurs, and if you ultimately receive a bill that’s more than $400 higher, you can potentially dispute it.

Medical events and medical debt can both be stressful—that’s the bad news. But individuals in the U.S. benefit from many consumer protections designed to make the debt repayment process fair and predictable. Medical debt may negatively impact your credit, but as you complete the debt collection process, your credit score can rebound over time.