Medical Debt Isn’t Going Away — Credit Report Disputes After the CFPB Ruling

The Consumer Financial Protection Bureau (CFPB) estimates that roughly 15 million Americans have seen their credit scores affected by medical debt, with $49 billion previously reported nationwide. These debts can lower your score, raise borrowing costs, and limit access to housing, jobs, and essential financial services.

But medical debt isn’t disappearing anytime soon, given the CFPB’s recent headline‑grabbing rule was struck down.

Medical Bills Can Still Hurt Your Credit

While recent changes by credit bureaus have offered some relief, like excluding paid debts and small balances, the system remains inconsistent and prone to error. Now, with the CFPB’s 2025 rule vacated by a federal court, most unpaid medical debts over $500 can still legally appear on your credit report, even if they’re outdated or inaccurate.

If medical bills appear on your report, now is the time to learn your rights under the FCRA, spot errors, and take steps to dispute them before they cause lasting damage.

How Medical Debt Impacts Your Credit

Medical debt was essentially treated like any other delinquent account on your credit report for years. A single unpaid bill could be sold to collections and reported to the credit bureaus, where it would remain for up to seven years, even if you eventually paid it. This often resulted in major credit score drops that affect everything from car loans to rental applications.

But medical debt is unique.

After all, no one chooses to get sick, and the maze of insurers, providers, and billing systems only makes things worse. Many accounts are reported before insurance completes processing claims, leading to unnecessary collections. Others are sold multiple times, creating duplicate entries for the same bill. Some debts are even listed with the wrong balance or appear older than they were due to inaccurate reporting.

These errors are common and especially frustrating for people whose only mistake was needing care in the first place.

Medical Debt Reporting Policy Updates

Even without the CFPB’s rule, recent changes by the major credit bureaus have eased some of the credit damage caused by medical debt.

What Have the Credit Bureaus Done about Medical Debt?

Since July 2022, Equifax, Experian, and TransUnion have removed paid medical collections from credit reports. In April 2023, they also began excluding medical debts under $500, regardless of payment status.

Consumers now have 12 months to resolve medical bills before they can appear on their credit reports, doubling the previous six-month window. These updates offer limited protection, but larger, unpaid debts are still reportable and can continue to hurt credit unless disputed.

How Credit Score Models Handle Medical Debt

Credit scoring models have also adjusted their approach to medical debt in recent years.

As of January 2023, VantageScore no longer factors medical debt into its credit calculations, reflecting a growing view that it doesn’t predict repayment behavior. FICO, the model most lenders rely on, still includes unpaid medical collections, but weighs them less heavily than other types of delinquent debt.

These changes help reduce some of the harm medical debt causes, but unpaid balances over $500 can still lower your FICO score, thereby impacting your credit.

The 2025 CFPB’s Medical Debt Rule Was Struck Down

In January 2025, just before the end of the Biden administration, the Consumer Financial Protection Bureau (CFPB) finalized a sweeping rule to ban nearly all medical debt from consumer credit reports. The agency projected it would raise affected credit scores by an average of 20 points and result in over 22,000 additional mortgage approvals annually.

The CFPB Changed Sides & the Court Agreed

This sounded like good news for those struggling with medical debt, but in July 2025, a federal judge in the Eastern District of Texas vacated the CFPB rule, siding with credit industry groups and the new CFPB leadership under President Trump, which had reversed course and refused to defend the rule in court.

After the administration change, the CFPB unexpectedly joined the lawsuit against its own regulation, claiming it lacked the authority to impose such a sweeping credit reporting restriction. The court agreed, ruling that only Congress can decide whether to exclude medical debt from credit reports under the Fair Credit Reporting Act.

How Will Medical Debt Affect Credit Reports Now?

With the CFPB’s rule officially struck down, most unpaid medical debts over $500 can still legally appear on your credit reports and hurt your overall credit score. This includes debts tied to disputed charges, delayed insurance claims, or care received during a medical emergency.

Although consumer advocates like the National Consumer Law Center fought to protect vulnerable individuals, the court’s decision stands. That means credit bureaus are not required to remove most medical debt, and lenders can continue using it to assess creditworthiness.

If you’re carrying medical debt, it’s crucial to review your reports, identify errors, and act under the FCRA.

Medical Debt May Look Different on Your Equifax Report

While the federal rules played out in court, Equifax has taken steps to make medical debt more visible and easier for consumers to identify. In June 2025, Equifax redesigned consumer credit reports and now feature a color-coded section specifically for medical collections. This section was designed to help you quickly identify bills that may be affecting your score.

Your VantageScore 3.0 also appears at the top, along with a breakdown of key factors, including whether medical debt is contributing to a lower score.

You can view the redesigned report by mail, through your myEquifax™ account, or the mobile app, making it a helpful starting point for reviewing and disputing medical debt under current reporting policies.

What to Watch for & How to Dispute Medical Debt Errors

Inaccurate or outdated information can unfairly drag down your credit score, sometimes for years. That’s why reviewing your reports carefully and knowing how to dispute issues is critical.

Common Medical Debt Errors on Credit Reports

Here are some of the most frequent and often legally actionable medical debt errors:

• Paid accounts are still listed as owed. If you’ve resolved a medical bill, it should no longer appear unpaid or in collections. Paid medical collections were supposed to be removed starting in July 2022.
• Debts under $500 are still showing. Since April 2023, medical collections with an original balance under $500 should no longer appear in your report. If they do, that’s an error worth disputing.
• Accounts reported too soon – Medical debts are not supposed to be reported until they are unpaid for at least 12 months. If a bill appeared earlier than that, it would likely violate current CRA policy.
• Duplicate or re-aged accounts—Some debts are sold to multiple collectors, which can result in the same bill showing up more than once. Others may be “re-aged” to look newer than they are, improperly extending their time on your report.
• Medical bills that aren’t yours – In some cases, you may see a bill related to someone else’s treatment, due to a clerical error or a mixed file. This can be particularly damaging and often signals identity issues.

How to Dispute a Medical Debt on Your Report

If you spot a medical debt error on your credit report, act right away. Under the FCRA, you still have the right to dispute inaccurate information, and the credit bureaus are legally required to investigate.

Start by visiting AnnualCreditReport.com to get free copies of your reports. Identify the specific error, whether the debt is paid, too old, duplicated, or not yours, and gather documentation to support your claim. You can file a dispute online, by mail, or through your myEquifax account.

Be clear, attach supporting records, and request that the debt be corrected or removed. The credit bureau has 30 days to investigate and respond. If they fail to act or continue reporting an error without proper verification, you may have grounds for a lawsuit and entitled to damages.

Take Control of Medical Debt & Dispute Errors

Medical debt remains a major threat to your credit, and too often shows up unfairly, inaccurately, or long after it should have been removed. While changes like the Equifax report redesign and updated reporting policies have made it easier to identify questionable entries, they haven’t eliminated the problem. Combine that with the fact that the CFPB’s medical debt rule is still in flux, and damaging medical debt info may continue to affect your score unless you take steps to challenge it.

Jeremiah E. Heck is a leading consumer attorney and founding partner of Luftman, Heck & Associates, an Ohio debt law firm committed to helping individuals navigate the complexities of challenging debt.

If you have questions or need advice about disputing medical debts, contact LHA for a free, no-obligation evaluation.