You Need to Know: How Medical Debt Can Damage Your Credit

When it comes to debt and your credit, all debt is not created equal. Some debt may have an extremely negative impact upon your credit. Other types of debt may impact your credit very little, or perhaps not at all. Some types of debt could even potentially help you to build better credit. So, you may find yourself asking, how medical debt can damage your credit?

Unfortunately the answer to the question “How will medical debt affect my credit?” is not so simple. In fact, there is no cookie cutter answer which is going to tell you how medical debt will impact your credit in every situation. How medical debt can damage your credit is going to depend upon a variety of factors. Keep reading to learn more.

Medical Debt and Your Credit

Protecting Your Credit from Medical Debt Problems

First of all, it will probably come as a relief to learn that medical debt is not automatically destined to damage your credit reports and scores. In fact, medical debt generally will not even find its way onto your credit report unless the debt has become past due or delinquent to the point that it is sold or turned over to a collection agency.

If you have medical insurance which covers your medical bills or if you pay out of pocket for your medical bills yourself then those accounts will most likely never show up on your credit reports at all. As you already know as a follower of the Credit Pros, if an account is not on your credit reports then it has no ability to impact your credit scores whatsoever.

Medical Debt Problems

However, medical debt can often be extremely expensive. The unfortunate truth is that sometimes the debt is not fully covered by your insurance and you cannot afford to pay your portion of the debt in one fell swoop. In other circumstances you may accrue medical debt which is not covered by insurance at all. In these instances your credit could certainly be at risk for damage, but simply giving up and accepting that the damage is forthcoming is not a good plan either. Even if you cannot afford to pay your medical debt in full you may have another potential solution – a payment plan.

Medical providers naturally desire for you to pay your bill in full, preferably at the time of service. Yet just because this is their preference does not mean that a medical provider will necessarily refuse to work with you in the event that you cannot afford to pay your bill in full immediately. Many (though certainly not all) medical providers will allow you to enter into a payment plan until your debt can be satisfied. A smaller number medical providers may even be willing to reduce your bill if the debt is not fully covered by insurance.

The most important point to keep in mind when it comes to medical debt is that ignoring the debt will almost certainly backfire and hurt you in the long run. Many medical providers will be willing to work with you if you simply give them a call and explain your situation. Do not be afraid to ask what they can do to help you. If you enter into an affordable payment plan and make those payments as agreed then chances are high you will be able to prevent your medical debt from ever showing up on your credit reports at all.

What Happens When You Ignore Medical Debt?

As already mentioned, unpaid and ignored medical debt can sometimes turn into big problems. Defaulted medical bills will generally be sold or assigned to collection agencies which will most likely result in a medical collection account appearing on your credit reports. In the most unfortunate situations for consumers, unpaid medical debt can even turn into judgments.

Ignore Medical Debt

Many consumers incorrectly believe that medical debts are not a big deal when it comes to their credit scores. It is “just” medical debt after all. Yet the truth of the matter is that medical collection accounts and judgments for unpaid medical debt can be equally as damaging to your credit scores as any other type of collection account or judgment.

When You Disagree

Remember, mistakes find their way onto credit reports every single day. Just because an item appears on your credit reports does not mean it is accurate. In fact the Federal Trade Commission found evidence of an estimated 40+ million mistakes on US consumer credit reports.


Do you have medical collections on your credit reports which you believe are incorrect? Are medical collections haunting your credit reports which you do not even recognize? You have the right to try to address these errors on your own, but we would also love to give you a hand. Please give our Credit Pros a call today at 800-411-3050. You can even CLICK HERE to schedule a free consultation and see how our Credit Pros may be able to help.