Medical Debt Relief

Dear Dr. Per Cap: 

What’s the status on medical debts and credit bureaus? I heard all medical debts will soon be deleted from credit reports.


Can’t Wait

Dear Can’t Wait,

What you’ve heard is partially true. The three credit bureaus Equifax, Experian, and Transunion will begin removing about 70% of medical debts currently listed on their consumer credit reports beginning in summer 2022.

This follows a trend over the last few years of the bureaus and lenders taking a more lenient view toward medical debt. Why? Large numbers of Americans have been unfairly saddled with debts due to medical billing and insurance hang-ups beyond their control. The situation has been even worse in some parts of Indian Country where bills from referrals and hospital visits to non-Indian health service providers have had a less-than-stellar track record of prompt payment.

The COVID-19 pandemic further underscored many of these problems and the bureaus have all finally agreed to make sweeping changes.  However, not all medical debts will be deleted. Instead, we’re mostly talking about medical debts that went into collections, but were eventually paid off. In the past, those paid collection accounts stayed on a person’s credit report for up to seven years and did damage to credit scores.

This is good news for many folks. However, if you’ve got current medical debts (in collections or held by another party) on your credit report that haven’t been paid off, chances are they aren’t going anywhere until that happens.

So if those debts are the responsibility of a third party, like an insurance company, Indian Health Service, or a Tribal health provider, make sure to contact those organizations to get them paid off as soon as possible. 

Another change relates to when unpaid medical collections are first listed on a credit report. That time frame will now be one year from when those accounts are sent to collections. This is six months longer than the previous policy, which will hopefully give consumers more time to work through the red tape.

Remember, collection companies buy old debts from creditors for a fraction of their original outstanding balance. Whatever they manage to collect from the consumer above that amount is money in their pockets.

Also on the horizon will be the handling of small-dollar medical collection debts. Those less than $500 won’t be listed on credit reports. I can’t tell you how many people I’ve worked with over the years that have been denied credit due to unpaid bills for x-rays, lab tests, and other medical costs under $500 that show up on credit reports.

Here’s to good health in the years to come – both physical and financial!

Ask Dr. Per Cap is a program funded by First Nations Development Institute with assistance from the FINRA Investor Education Foundation. For more information, visit To send a question to Dr. Per Cap, email