Medical Debt Reporting Has Changed Significantly
If you have medical debt on your credit report, it's worth knowing that the rules around medical debt reporting have undergone major changes in recent years — and those changes may work in your favor.
In 2022, the three major credit bureaus — Equifax, Experian, and TransUnion — announced voluntary policy changes regarding medical debt. In April 2023, they went further: all paid medical collection accounts were removed from credit reports entirely. Medical collections under $500 were also removed. And the waiting period before an unpaid medical collection can appear on your credit report was extended from 6 months to 12 months.
These changes mean that if you have a paid medical collection, it should not be on your credit report at all. If you have a medical collection under $500, it also should not be on your report. If either of these appears on your report, that is an error you can dispute.
Types of Medical Debt Errors to Watch For
Paid medical collections still appearing. Under the bureaus' current policies, paid medical collections should have been removed. If one is still on your report, dispute it directly.
Medical collections under $500 still appearing. These should have been removed in 2023. If a small medical collection is still showing, that's a reportable error.
Insurance payment not reflected. One of the most common medical billing errors: your insurance company paid the bill, but the medical provider or hospital sent it to collections anyway before confirming the insurance payment. By the time insurance processes the claim, you have a collection on your report for a debt that was actually covered.
Balance errors. Medical billing is notoriously complex. The balance reported to the collection agency may not match what you actually owe after insurance adjustments, negotiated rates, or partial payments.
Duplicate medical collections. Medical debts are frequently sold between collection agencies. The same underlying medical bill may appear as two or three separate collection accounts, each with its own balance.
Incorrect original creditor. Medical collections should identify the original healthcare provider. If the name listed is wrong or unrecognizable, it can make it harder to verify and dispute.
How to Dispute Medical Debt Errors
Step 1: Identify what you're looking at. Note the collection agency, the original creditor (should be the hospital or provider), the balance, and the date of first delinquency. Cross-reference with your own medical bills and insurance explanation of benefits (EOB) statements.
Step 2: Contact your insurance company first. If the debt should have been covered by insurance, contact your insurer and request documentation showing the claim was paid or processed. An EOB showing the claim was paid is strong evidence for your dispute.
Step 3: File a dispute with the bureau. Reference the specific error — wrong balance, paid collection still showing, collection under $500 still present, insurance payment not reflected. Attach your EOB, insurance confirmation, or payment receipt.
Step 4: Dispute with the collection agency. Under the FCRA, you can dispute directly with the furnisher. If the medical debt should have been covered by insurance, send the EOB to the collector and request that they verify the debt and update or remove their reporting.
Step 5: Request debt validation. If a debt collector contacts you about a medical bill, send a debt validation letter within 30 days requesting the name and address of the original creditor, the amount of the debt, and verification that you owe it. Collectors must stop collection activity until they validate the debt.
The Bigger Picture
Medical debt is now treated differently from other consumer debt by many lenders and scoring models. FICO Score 9 and VantageScore 3.0 and above give less weight to paid medical collections, and the bureaus' recent policy changes have removed millions of medical collection accounts from consumer credit reports. If you haven't checked your report recently, you may find that medical collections you were aware of have already been removed.