Do you think medical debt can’t hurt your credit score anymore? A lot of people believe that right now. It’s not true.
In January 2025, the government finalized a rule to ban medical debt from credit reports completely. It sounded like great news for the roughly 15 million Americans with medical debt showing up on their credit.
Then, in July 2025, a federal court in Texas threw that rule out. The judge ruled the government didn’t have the legal authority to make that rule in the first place.
When I read that the rule got overturned, I was confused. Everyone on social media said medical debt was protected now. Turns out that protection was never solid to begin with.
So here’s where things actually stand today. There is no federal law banning medical debt from your credit report. If you assumed there was, because of news from last year, you were working off information that’s no longer true.
So does medical debt affect credit score US 2026 the same way it used to? Not exactly. Under current credit reporting rules, paid medical debt no longer appears on your report at all, and unpaid medical bills under $500 are also excluded. But once a medical bill crosses that $500 mark and stays unpaid, it can still show up as a collection account and pull your score down significantly.
The real danger is timing. Medical providers often wait months before sending a bill to collections, so many people don’t realize a small ER visit or lab test is about to become a credit problem. Checking your credit report every few months catches these before they snowball, especially since one unpaid collection account can stay on your report for up to seven years.
Does that mean every medical bill you owe is now hurting your credit? Not exactly. There’s still real protection, just not from the government.
The three big credit bureaus, Experian, Equifax, and TransUnion, made their own voluntary promise back in 2022 and 2023. They agreed to three things: paid-off medical debt gets removed completely, unpaid medical bills under $500 don’t get reported at all, and new medical debt gets a 365-day grace period before it can show up.
That’s a real, working protection today, but notice the word “voluntary.” Nothing forces the bureaus to keep doing this. They could change their policy anytime, and there’d be no law stopping them.
On top of that, 15 states, including California, New York, Colorado, and Illinois, passed their own state laws banning medical debt from credit reports. The Texas court hinted these state laws might not hold up either, but that part of the ruling wasn’t a real decision, just a comment. Nobody has actually challenged those state laws in court yet, so they’re still considered valid for now.
The credit bureaus could wake up tomorrow and change their minds. They’re not doing this because they have to — they’re doing it because right now it’s good PR. That makes me nervous about relying on it long-term.
| State Protection | Status (2026) | Medical Debt Ban | Enforcement |
|---|---|---|---|
| California | Active | Yes | State law |
| New York | Active | Yes | State law |
| Colorado | Active | Yes | State law |
| Illinois | Active | Yes | State law |
| 11 Other States | Active | Yes | State law |
| Federal Rule | Overturned | No (July 2025) | Court struck down |
| Credit Bureau Policy | Voluntary | $500+ unpaid | No enforcement |
Do you live in one of those 15 states? If so, you likely have stronger protection than most of the country right now, whether you knew it or not.
Check this too: Average American Owes $6,715 in Credit Card Debt
So what should you actually do? Pull your free credit report at AnnualCreditReport.com and check for medical debt entries. If something is under $500, or already paid off, or newer than 365 days, and it’s still showing up, that’s against the bureaus’ own policy, and you can dispute it. If your bill seems wrong in the first place, check with your insurance company first, billing errors and denied claims are extremely common.
Did you think medical debt couldn’t touch your credit anymore? Are you going to check your own report after reading this?
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Disclaimer: This article is for educational purposes only and should not be considered as legal or financial advice. Medical debt laws, credit bureau policies, and state protections vary by location and situation. Consult with a qualified attorney or credit counselor before making decisions about medical debt.
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