Medical debt can have a significant impact on your credit reports and scores, but there are specific rules and considerations regarding its inclusion and handling:

1. Paid Medical Debt Was Removed (As of 7/1/23):

• Starting from July 1, 2023, paid medical debt is required to be removed from your credit reports. This change aims to provide relief to individuals who have resolved their medical bills by ensuring that paid medical debt no longer negatively affects their credit scores.

1. Debt Can Only Be Added After 1 Year:

• To allow individuals time to resolve medical bills, the law typically requires a one-year waiting period before medical debt can be added to your credit reports.

1. Debts Under $500 Cannot Be Included on Reports:

• Some credit reporting models and regulations exclude medical debts that are under a certain threshold, often $500. This means that medical debts below this amount may not appear on your credit reports.

1. FICO 9 and Vantage Score Give Less Weight to Medical Collections:

• Some credit scoring models, such as FICO 9 and certain versions of the VantageScore, weigh medical collections less heavily compared to other types of collections. This recognizes that medical debt can often be unexpected and beyond an individual’s control.

1. Paid Medical Debt Doesn’t Factor in at All:

• As mentioned earlier, after July 1, 2023, paid medical debt should not be considered when calculating your credit scores. This means that even if you had past medical debt that you’ve paid off, it should not negatively affect your credit standing.

1. Other Debt Will Stay on for as Long as 7 Years:

• While paid medical debt is being removed from credit reports, other types of debt, such as credit card debt or personal loans, may stay on your credit reports for up to seven years from the date of the initial delinquency or the date the account was closed.

It’s important to note that the impact of medical debt on your credit can still vary based on the credit scoring model used by lenders. Some lenders may use older scoring models that weigh medical collections more heavily. However, these changes in regulations and scoring models are designed to offer more fairness and leniency regarding medical debt, recognizing that it can often be a result of unexpected medical emergencies.