Good news for credit scores: Medical debt under $500 has been removed from credit reports!

Many American families were struggling financially due to the high cost of healthcare. Unpaid medical bills can affect credit scores even if they are small.

Equifax, Experian, and TransUnion have dropped low-balance medical debt, potentially boosting credit scores for some consumers.

Despite having paid a delinquent medical debt, a person's credit score may be negatively affected. Currently, Americans have nearly $88 billion dollars of medical debt that can damage their credit scores, which is set to change with the new change.

Medical billing practices can put a strain on people’s budgets and, for many, propel them toward bankruptcy. A survey conducted by the American Journal of Public Health of bankruptcy filers found that the majority said medical expenses contributed to their seeking relief.

Medical collections with balances of $500 or less should no longer appear on consumer credit reports.

On Tuesday, the three major credit bureaus — Equifax, Experian, and TransUnion — announced that medical collections with balances of $500 or less would no longer appear on consumer credit reports.

This is a significant step in helping millions of people — particularly those who are young and on the lower end of the wage scale — who rely on having a good credit score to get an apartment or an affordable loan.

“We understand that medical debt is generally not taken on voluntarily, and we are committed to continuously evolving credit reporting to support greater and responsible access to credit and mainstream financial services,” the chief executives of the credit bureaus said in a joint statement.

With this change, nearly 70 percent of all medical debt sent to collections is no longer part of consumer credit files, the executives said.

Additional changes

“We believe that the removal of medical collection debt with an initial reported balance of under $500 from [US] consumer credit reports will have a positive impact on people’s personal and financial well-being,” the CEOs said.

Past-due medical debt impacts over one in seven adults, according to an Urban Institute report released last month. Additionally, nearly two-thirds of adults affected by past-due medical debt have incomes below 250 percent of the federal poverty line.

Regardless of insurance coverage, most adults under the age of 65 have experienced medical debt, reports Kaiser Family Foundation. This debt can lead to serious health consequences, including denied services and forgone care, as well as financial challenges, such as depletion of savings, going without household essentials, and damage to credit scores.

Equifax, Experian, and TransUnion have already eliminated all medical debt collection that had been paid by the consumer from US consumer credit reports. The time period before unpaid medical debt collection appears on a consumer’s credit report also increased from six months to one year in an effort to give consumers more time to address the debt before it was reported on their credit file. These changes went into effect in July 2022.

 Michelle Singletary, "Finally, medical debt under $500 has been removed from credit reports", Accessed on April 18th, 2022,

Jacqueline LaPointe, "Major Credit Bureaus Remove Medical Debt Collections Under $500", Accessed April 18, 2022,

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