How to Remove Medical Debt from Your Credit Report Legally

Medical bills can become part of a person’s life after an unexpected event. When these bills aren’t paid on time, they can become debts that appear on credit reports. That debt can lower a person’s credit score by dozens or even hundreds of points.

Credit scores range from 300 to 850. A drop of 50 points can mean higher interest rates on personal loans, credit cards, or mortgages. Removing or resolving medical debt listed on your credit report can help you save money and maintain a healthier credit profile.

However, you can only remove medical debt that was unfairly displayed on your credit report. Otherwise, you will have to settle bills or work out a plan with creditors or healthcare providers to reduce the impact of debt on your FICO rating. This guide will walk you through the process and help you safeguard your credit health.

Why Medical Debt Can Affect Your Credit

Unpaid medical bills can be reported to credit bureaus if they remain past due. Some hospitals or clinics turn unpaid accounts to collection agencies within 90 days. Others might wait 180 days. When a collection agency comes into play, it can report your debt to Experian, Equifax, or TransUnion. That report can stay on your credit file for up to seven years unless you take steps to remove or fix it.

Credit scoring models, including FICO® and VantageScore®, treat medical collections as negative items. Though newer scoring models weigh medical debt less than other debts, older models can still cause credit scores to drop by more than 70 points once a debt is listed as a collection. This can happen for amounts as small as $100, especially if those debts remain unpaid for over six months.

Accounts in collections, including medical bills, often make lenders see you as a high-risk borrower. If you apply for a personal loan, the lender might decline your application or only approve it at a high APR. That difference can cost hundreds or thousands of dollars in total. It also affects credit card applications, mortgages, auto loans, and lines of credit.

How to Identify and Verify Your Medical Debt

You can request copies of free credit reports from each of the three major bureaus once every 12 months. Online platforms offer updated reports or monitoring services to help spot new items. Once you receive a report, review every section and look for any entries labeled “Medical,” “Healthcare,” or “Collection.”

Check the collection agency’s name, the original creditor (hospital, clinic, or medical group), and the date opened. Confirm the debt amount listed. If the amount is $700, but your statements show a $400 balance, this discrepancy may indicate an error. Mistakes can happen if the agency adds fees or mixes up patient accounts.

Keep track of account numbers, billing dates, and any payment records. If you see an unpaid debt from a clinic you’ve never visited or a doctor you don’t recognize, it might be a case of mistaken identity. A debt that belongs to a person with a similar name might have landed on your report. You can use proof such as ID copies, insurance statements, or Explanation of Benefits (EOB) forms to confirm or dispute an entry.

When you are certain an item belongs to you, compare it with statements from your insurer and the provider. Confirm that the bill was processed properly if your insurance was active during the service date.

Steps to Dispute Errors on Your Report

Credit bureaus and lenders must follow the Fair Credit Reporting Act (FCRA), but two simple steps can help you achieve a more accurate report:

Gather Essential Documentation

Collect every piece of evidence related to your bill, such as:

Billing statements showing the date of service and amount owed.
Proof of insurance coverage, such as an active policy or an explanation of benefits.
Receipts showing any payments you have already made.
Correspondence with the provider or the collection agency.

Keep digital or physical copies in a secure folder. Write a short note explaining each document’s purpose.

File and Track Your Dispute

Once you have your supporting documents, you can file the dispute with each bureau that lists the error. Submitting can be done in the following ways:

Online: Each bureau’s website has a portal to upload documents.
By mail: Send a letter to the bureau and photocopies of your evidence.
By phone: Some bureaus let you dispute smaller items by calling their hotline.

Include your name, address, the account number (if available), and the reason for the dispute. Write in simple language. State that the entry is inaccurate and should be removed or updated. If you send your dispute by mail, use certified mail and keep the receipt. Mark the date so you can track how long it takes for a bureau to respond.

A credit bureau must investigate your dispute within 30 days. After the investigation, the bureau must inform you of the result. Your credit report should reflect those changes if the bureau deletes or corrects the entry.

Negotiate Payment Plans or Settlements

If the debt is accurate and you owe the bill, you may remove it from your credit report by paying it in full or settling for a reduced amount. There are cases where the collection agency agrees to a “pay for delete” arrangement. It never hurts to ask. Below are some steps you can take.

Discuss Options with Healthcare Providers

Hospitals often have billing offices that can work out arrangements with you. Some may reduce a $1,500 bill to $1,000 if you demonstrate financial hardship. Others may let you pay $150 monthly until the debt is cleared. If you pay on time, these plans may come with a 0% interest rate.

Try contacting the billing department and explain your situation. You can ask if there is a medical debt forgiveness policy in place. Some hospitals have a policy to reduce or forgive 50% to 100% of a patient’s bill if they meet certain income or insurance criteria. Provide documentation of your finances if necessary.

Seek Assistance from Third Parties

Debt negotiation services can help if you feel overwhelmed. However, they might charge a fee of 15% to 25% of the debt they settle. If you hire a professional, confirm that the agency has a good reputation and is licensed. Avoid any company that promises quick fixes or “guaranteed” removals. A legitimate service should explain your rights, discuss possible outcomes, and inform you how they plan to negotiate.

Some nonprofit credit counseling agencies may help you review options for medical bills. They can create a budget for repaying debts while covering other essential expenses. This type of guidance can help you prioritize which bills to tackle first.

Access Medical Debt Relief Programs

If you cannot afford to pay the full debt, or if you need extra help, specific relief programs may be open to you:

Explore Government and Nonprofit Support

Government-backed programs offer free or reduced-cost health services to residents who meet certain guidelines. For example, a county health system might waive $500 of a $700 bill if you can show that your income is below a certain threshold. Government grants or subsidies can help in other ways. Patients who qualify might have their medical debt paid off by specific relief funds, leaving them with no balance to send to collections.

Certain groups also purchase portfolios of overdue medical accounts from hospitals. Once they own them, they forgive the debts and remove them from a person’s credit file. These nonprofits often focus on modest—to middle-income households with bills they cannot handle.

You can check if your local or regional nonprofits run such a program. If you’re accepted, the nonprofit notifies the original creditor or the collection agency. The debt is then marked as forgiven and should be updated on your credit report within 30 days.

Understand Your Rights Under Consumer Protection Laws

Federal and state laws protect consumers from unfair collection practices. Under the Fair Debt Collection Practices Act, a collection agency cannot threaten, harass, or deceive you. They must give accurate details about the amount owed. They must also stop contacting you if you ask in writing.

Some states have stricter regulations. For example, they may require a 120-day waiting period before any medical debt can be reported to a credit bureau. This rule can help people settle or dispute a bill before it hurts their credit. Check if your state has similar laws in place.

Maintain Your Long-Term Credit Health

Paying your medical or other debts can raise your credit score. To get started, track your reports by ordering them each year from AnnualCreditReport.com. You can watch for mistakes or new collections on a rolling basis. Check for any new negative items if you see a sudden drop of 20 to 40 points.

It may help to set calendar reminders for medical bill due dates. If you use insurance, verify that the provider submits claims. Follow up with your insurer if you do not receive an Explanation of Benefits within 30 days of service. Save every important document.

Finally, be cautious with high-interest debt. Some providers offer medical credit cards at 24% APR or higher rates if the promotional period ends. Missing a payment on such a card can cause late fees and a negative item on your credit report. Research any financing option, ask about rates, and compare it to other solutions.

Removing medical debt from your credit report requires many steps, so planning can keep your credit score higher and your financial stress lower.