How to fight medical debt on your credit report – Consumer Protection Week 2024

WASHINGTON – Credit reports are often used to measure a person’s financial reliability. A bad credit report could mean you’ll get turned down for a loan, you won’t get the apartment you want or you’ll pay higher interest on a car loan. A bad credit report could even convince a prospective employer to not consider you for a job. But credit reports often contain errors. In fact, inaccurate information is the most common problem mentioned in credit report complaints that people submit to the Consumer Financial Protection Bureau (CFPB). 

Many Americans face large medical bills that they have difficulty paying on time, which can result in medical debt. PIRG has been advocating that medical debt should be treated differently on credit reports. As opposed to many other types of debt, medical debt doesn’t indicate that a person is a poor financial decision-maker. Even the most fiscally responsible person can amass significant debt to treat a serious injury or illness. 

“Medical debt isn’t like going on a shopping spree or spending above your budget. That’s why credit reports shouldn’t include any debt arising from medically necessary procedures,” said Patricia Kelmar, U.S. PIRG Education Fund’s health care campaigns director. “No one should have to worry about their creditworthiness being sullied for years just because they got injured or sick.”

Thanks in part to PIRG, the three major credit bureaus have changed the way they handle medical bills on credit reports. Because credit reports often contain inaccurate information, we recommend that people check their credit report for three things:

1. Check to make sure your credit report doesn’t include any medical bills you don’t recognize or owe. Providers and hospitals make mistakes when sending bills. Don’t let incorrect bills ruin your credit history. (To check your credit report, go to www.annualcreditreport.com or call 1-877-322-8228.)
2. Nearly one in three people in the U.S. struggles with unpaid medical bills. If you are one of them, but you owe less than $500, it should not be listed on your credit report.
3. Medical debt used to stay on your credit report for seven years, but now any paid debt should not appear on your credit report.

The CFPB is considering making this voluntary policy mandatory and is considering other ways to protect people with medical debt from the harmful effects of a negative credit report.

Here’s what to do if you find any errors on your credit report: How to make sure your credit reports don’t include paid medical debt

For other tips on fighting medical bills, check out our six-part guide: Medical Bills: Everything you need to know about your rights.

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