The status of credit accounts is shown on credit reports and significantly impacts credit scores. An account that shows a long history of being paid as agreed boosts a score. Dings to a score happen when accounts are delinquent by 30 days or more.

When a consumer is 90 days or more late on a payment, many lenders will sell the unsecured debt to a collection agency. Accounts in collections cause a more significant drop in a credit score than a ding. Even if a consumer pays or settles the debt, it can still show up on the report and negatively impact a credit score.

For many decades, the three major credit reporting agencies followed the same credit reporting protocols for medical debts as for any other type of debt. In April 2023, they changed policy and removed medical debt collections under $500 from credit reports. The reporting agencies also removed any paid medical collections from credit reports.

Keep in mind – these changes apply to medical debt held by collection agencies. A medical debt that is paid with a credit card is considered consumer debt, and the special protocols for medical debt do not apply.

Free weekly credit reports can help you monitor the status of credit accounts and the accuracy of information reported about you. By regularly reviewing your credit reports, you can catch errors early, track how medical and other debts are being reported, and take steps to improve or protect your credit score.

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