Credit Reporting Agencies Adopt New Rules for Medical Debts

Credit Reporting Agencies Adopt New Rules for Medical Debts

May 12, 2022

Beginning July 1, millions of consumers saddled with medical debt impacting their credit scores will get some much-needed relief.

The three major credit reporting companies –Equifax, Experian, and TransUnion – have agreed to three significant changes in how they use medical debt to calculate a person’s credit score.

As of July 1, 2022:

  • Medical debt that went into collections but was eventually paid off in full will no longer be included on consumer credit reports.
  • The grace period before unpaid medical debt that is in collections is added to a consumer’s credit report is currently six months. That will be extended to one year to allow consumers more time to provide documentation or otherwise resolve outstanding debts.


Additionally, in 2023 medical debt that has gone to collections and has an unpaid balance of under $500 will no longer appear on an individual’s credit report.

These changes are expected to remove billions of dollars in medical debt from credit reports. A study in 2021 by the Consumer Financial Protection Bureau (CFPB) found that Americans had more than $88 billion in medical debt on their credit reports, with one in five households reporting carrying medical debt.

The study further confirmed what many have assumed –COVID-19 has worsened the burden on families when it comes to medical debt. In addition to the testing, medical care and hospitalization costs many Americans incurred as a result of COVID-19, it is expected that post-pandemic, people will return to doctors for treatments delayed by the pandemic, thus creating a new wave of medical debt.

In our practice, we work closely with many existing small business owners as well as entrepreneurs seeking to start new businesses. In every case, a negative credit report can gravely impact their professional goals. It can be particularly difficult when that negative report is driven by something such as a medical emergency that was unforeseen and unpreventable. The intent of these revised rules is to minimize these types of situations and not overly burden Americans with a negative credit score based on medical care.

To learn more about the CFPB study, click here.

Kevin Lelonek is an associate attorney with Gross Shuman P.C. He provides counsel to clients in the areas of business bankruptcy and reorganization as well as commercial and business litigation. He can be reached at 716-854-4300 ext. 297 or