Medical Debt and Your Credit Score: 2026 Rules Explained

Introduction: The Rules Changed - And Most People Don’t Know It

For decades, medical debt was treated the same as any other unpaid obligation in the eyes of the credit reporting system. A hospital bill sent to collections could sit on your credit report for seven years. It could drag your score down by 100 points or more. It could cost you a mortgage approval, a car loan, or a job offer - long after the medical crisis that created the debt had passed.

That system was always imperfect. Medical debt is fundamentally different from consumer debt: you do not choose to get sick, you rarely choose your provider or know the price in advance, and billing errors - not patient irresponsibility - are responsible for a significant portion of medical collections. Study after study showed that medical debt was a poor predictor of creditworthiness compared to other debt types, yet it was penalizing millions of Americans in the credit market every year.

Between 2022 and 2024, that began to change - dramatically.

The three major credit bureaus (Equifax, Experian, and TransUnion) announced and then implemented voluntary changes that removed hundreds of millions of medical debt accounts from credit reports. Then, in 2024, the Consumer Financial Protection Bureau (CFPB) issued a final rule that went further: prohibiting medical debt from appearing on credit reports altogether.

If you are one of the roughly 100 million Americans who have dealt with a medical bill in the past several years, these changes may have already affected your credit report - and you may not know it. The score you checked three years ago may look very different today without any action on your part.

This guide explains everything: the full timeline of what changed and when, what (if anything) can still appear on your credit report, how to check your report and understand what you see, and what to do if outdated or incorrect medical debt is still showing up. We also cover the practical implications for your financial life - what these changes mean if you are applying for a mortgage, a car loan, or a new apartment in 2026.

Our broader Patient Rights Guide covers the full system of what you are entitled to as a medical consumer. For help with a specific medical bill currently in collections, see our guide on how to negotiate a bill in collections.

For guidance on dealing with bills currently in collections, see our negotiate bill in collections guide. Understanding your rights under state charity care laws is covered in the charity care guide.

Let us start with what changed, and when.

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Timeline of Changes: 2022 to 2026

The transformation of medical debt credit reporting did not happen overnight. It unfolded through a series of discrete steps, each building on the last. Understanding the timeline helps you know exactly which rules apply to which debts and when each change took effect.

March 2022: The CFPB Issues a Wake-Up Call

In March 2022, the CFPB published a detailed research report examining the relationship between medical debt and credit reporting. The report’s findings were stark: approximately 43 million Americans had medical debt on their credit reports at that time, totaling about $88 billion. Medical debt accounted for roughly 58% of all third-party debt collections appearing on credit reports. And crucially, the bureau found that medical debt was a significantly weaker predictor of future credit default than other types of debt - meaning lenders were penalizing borrowers based on information that did not actually predict their likelihood of repayment.

The CFPB’s report was not a regulation, but it served as a public signal of what the bureau believed was broken about the system - and a clear warning to the credit bureaus that regulatory action was being considered.

July 2022: The Three Credit Bureaus Announce Voluntary Changes

In July 2022, Equifax, Experian, and TransUnion announced a coordinated set of voluntary changes to how they would handle medical debt. The announcement came six months after the CFPB’s report and signaled that the bureaus were moving proactively to avoid federal mandates. The changes they announced:

• Paid medical debt would no longer appear on credit reports beginning July 1, 2022. Previously, a paid medical collection could remain on your report for up to seven years. Under the new policy, once you paid a medical collection (or it was paid by insurance), it would be removed.
• Unpaid medical debt under $500 would be removed from credit reports beginning in the first half of 2023.
• The grace period for medical debt before it could be reported to the bureaus would be extended from six months to one year.

These were significant changes on paper. The removal of paid medical collections alone was expected to affect tens of millions of accounts.

April 2023: Debts Under $500 Removed

On schedule, in April 2023, the three major credit bureaus completed the removal of medical collection accounts under $500 from all consumer credit reports. The CFPB estimated that approximately 22.8 million people had at least one medical collection account under $500 removed from their report as a result of this change. For many of these consumers - disproportionately lower-income Americans who faced small but financially devastating medical bills - this represented the first time in years (or ever) that their credit report was free of medical collections.

The score impact was immediate. CFPB research found that, for consumers who had medical debt removed from their reports, average credit scores increased by approximately 20 points. For some consumers - particularly those with thin credit files where the medical collection was one of only a few items - the increase was substantially larger.

2023-2024: The CFPB Moves Toward a Final Rule

While the voluntary changes from the bureaus were meaningful, the CFPB was not finished. The bureau had long-standing concerns that voluntary policies could be reversed and that the changes did not go far enough. In September 2023, the CFPB proposed a formal rule that would prohibit consumer reporting agencies from including medical debt information in consumer credit reports.

The proposed rule was broader than the voluntary changes: it would apply to all medical debt, not just small or paid accounts, and it would create an enforceable legal standard rather than a discretionary bureau policy.

After a public comment period, the CFPB finalized the rule in January 2025, with the rule taking full effect in March 2025.

March 2025: The CFPB Final Rule Takes Effect

The CFPB’s final rule - formally titled “Medical Debt: Prohibition on Creditors and Consumer Reporting Agencies” - prohibits consumer reporting agencies from including medical debt information on consumer credit reports. It also prohibits creditors (such as mortgage lenders and banks) from using medical debt information in credit decisions.

Under the final rule:

• Medical debt collections may not appear on consumer credit reports.
• Creditors may not use medical debt information in credit underwriting decisions.
• The rule applies to medical debt in all amounts and all stages - whether paid or unpaid, small or large, recent or historical (within the seven-year reporting window).

The practical effect in 2025 and into 2026 is that medical debt - as a category - is effectively removed from the consumer credit reporting ecosystem.

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What Still Appears on Your Credit Report: Edge Cases and Exceptions

The sweeping changes described above have removed the vast majority of medical debt from American credit reports. But “most” is not “all.” There are scenarios in which medical-related debt can still appear on your credit report in 2026, and understanding these edge cases is important.

Debt Misclassified as Non-Medical

A debt collector who purchased your medical account from a hospital may report it to the bureaus under a generic “collections” category rather than specifically as medical debt. Historically, this was common - some collection agencies would deliberately obscure the nature of the debt in their reporting. Under the CFPB’s final rule, this practice is prohibited; the rule covers medical debt regardless of how it is categorized if it originates from medical services. However, enforcement takes time, and you may still encounter improperly categorized accounts.

Personal Loans or Credit Cards Used for Medical Bills

If you put a medical bill on a credit card, or took out a personal loan to pay a medical bill, that debt is categorized as credit card debt or personal loan debt - not medical debt. The credit reporting rules and protections for medical debt do not apply to it. These accounts will appear on your credit report and be treated as ordinary consumer debt. Medical credit cards like CareCredit and Alphaeon function identically to general credit cards in this respect.

Debts That Predate the Rule Implementation

Accounts reported before the rule’s effective date may require active removal through the dispute process. The credit bureaus have been working to purge historical medical accounts, but the process is not instantaneous. If you have an older medical collection that was first reported in, say, 2021, it may still appear on your report until the bureau processes its removal - which may require you to file a dispute to trigger that review.

State-Level Protections and Local Nuances

Several states have enacted their own medical debt credit reporting protections that go beyond federal requirements, and some predated the CFPB’s 2025 rule. Colorado, New York, and California all passed state-level legislation in this area. While federal law now covers the system broadly, state rules can provide additional remedies if you need to pursue a dispute.

The Seven-Year Clock

The FCRA’s standard seven-year reporting window still defines the outer limit for any debt - medical or otherwise - on your credit report. Accounts that have aged past seven years since the date of first delinquency must be removed regardless of any other consideration. If a collection agency is attempting to collect on a debt that first went delinquent more than seven years ago, it is violating federal law.

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How Medical Debt Used to Affect Credit Scores: Historical Context

To fully appreciate how much has changed, it is worth understanding what the old system looked like - both because it explains why millions of Americans still carry the psychological weight of these rules, and because historical debts may still be appearing on some reports.

The Old Seven-Year Rule

Before the 2022-2025 changes, medical debt followed the same rules as any other collection: it could appear on your credit report for seven years from the date of first delinquency. A hospital bill that went to collections in 2018 could remain on your report until 2025, dragging your score down every year it appeared. During that period, you might have paid the debt, resolved the underlying billing dispute, even received a retroactive insurance payment - and the collection could still remain.

The Score Penalty Was Severe

Credit scoring models, particularly the older FICO 8 model that most lenders were using, treated medical collections essentially identically to other collections. A single medical collection account could reduce your credit score by 50 to 100 points, depending on the amount and your overall credit profile. For someone with limited credit history, the impact was even larger - a single medical collection could drop a thin-file borrower from “fair” to “poor” credit territory, effectively closing off access to standard loan products.

Medical Debt Was Ubiquitous in the Lower Score Brackets

CFPB research found that medical debt accounted for a disproportionate share of collection items among consumers in the 580-669 credit score range - the “fair credit” territory where consumers face materially higher interest rates and loan denials. Many of these consumers had no other negative credit history; their “fair” score was almost entirely a product of medical collections. This created a pattern where health emergencies - the most unpredictable and uncontrollable financial shocks most people face - were effectively a credit score penalty that persisted for years.

Newer Models Had Already Begun to Deweight Medical Debt

FICO’s newer scoring models (FICO 9, released in 2014, and FICO 10, released in 2020) had already begun to deweight paid medical collections and treat medical collections differently from other collections. VantageScore 4.0 went further, disregarding medical collections entirely. The problem was that lender adoption of newer scoring models was slow - most mortgage lenders were still required to use older FICO models by Fannie Mae and Freddie Mac guidelines well into the early 2020s. So even as the scoring models evolved, the practical impact for borrowers seeking mortgages lagged.

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The New Reality: What the Changes Mean for Your Financial Life

The removal of medical debt from credit reports is not just a technical change to how bureaus compile data. It has real, material consequences for your financial life in 2026 - some of which you may already be experiencing, and some of which you may not have connected to these rule changes.

Credit Scores Have Risen - Often Significantly

The most immediate effect is the direct improvement in credit scores for people who had medical collections removed. The CFPB estimated that the 2023 removal of sub-$500 accounts alone raised credit scores for affected consumers by an average of 20 points. For the full sweep of removals through 2025, the aggregate score impact across the population is substantially larger. Many consumers have moved from “fair” to “good” credit, or from “good” to “very good” - crossing thresholds that unlock materially better loan terms.

Mortgage Access Has Improved

One of the most consequential effects of medical debt credit reporting reform is in the mortgage market. For borrowers who were previously denied mortgage preapproval due to medical collections, or who were approved only at subprime rates because their score fell below conventional lending thresholds, the removal of medical debt from their reports may have opened the door to homeownership or significantly better loan terms.

If you were turned down for a mortgage in the past two to three years and had medical collections on your report at the time, it is worth requesting a new credit check. Your score may have improved enough to qualify you for products you could not previously access - and at substantially lower interest rates.

Auto Loans and Rental Applications

Similar dynamics apply to auto lending and apartment rental applications. Auto lenders and landlords often use credit scores and credit reports as screening tools. If medical collections were dragging your score below their screening thresholds, those barriers may now be gone. Again, the key is actually checking your current report rather than assuming your credit situation is unchanged from years ago.

The Remaining Impact on Access to Credit

It is important to be clear about what these changes do not fix. Medical debt that was converted into personal loans or charged to credit cards still affects your score. If the underlying medical crisis led to other financial disruptions - missed rent, missed utility payments, other collection accounts - those remain on your report. The reform removes one source of credit score damage, but it does not erase the broader financial consequences of serious illness or injury. It is a meaningful step, not a panacea.

Medical Debt Can Still Be Collected

Critically, the credit reporting changes do not eliminate the debt itself. Providers and collection agencies can still pursue collection of unpaid medical debt through calls, letters, and lawsuits. The rules change what can appear on your credit report - they do not change your legal obligation on validly owed debts. If you have outstanding medical debt in collections, the right strategy is to engage with it proactively rather than assuming that because it does not appear on your credit report, it has disappeared. Our guide on negotiating a bill in collections covers your options in detail.

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How to Check Your Credit Report in 2026

Understanding the rules is only useful if you actually review your credit report and verify that it reflects those rules correctly. Here is a practical guide to checking your report and knowing what to look for.

AnnualCreditReport.com: The Official Source

The official and legally mandated free source for your credit reports is AnnualCreditReport.com. This site is operated by the three major credit bureaus under a requirement from the Fair Credit Reporting Act. As of 2023, federal law entitles you to free weekly reports from all three bureaus - up from the previous standard of one free report per bureau per year.

This means you can check your reports from Equifax, Experian, and TransUnion every single week at no cost. There is no reason not to review your reports regularly.

Be careful with similar-sounding websites. AnnualCreditReport.com is the authorized free source. Many commercial services offer “free” credit monitoring that eventually bills you for a subscription. Go directly to AnnualCreditReport.com.

What to Look for on Your Report

When you pull your reports, go through them systematically:

Section 1: Personal Information Verify that your name, address history, Social Security number, and date of birth are accurate. Errors in personal information can indicate mixed files (your data mixed with another person’s) or potential identity theft.

Section 2: Accounts (Tradelines) Review every open and closed account. For each one, verify: Is this your account? Is the payment history accurate? Is the account status correct (open, closed, paid, etc.)?

Section 3: Collections This is the section most relevant to medical debt. In 2026, you should see no medical debt collection accounts. If you see any collection accounts, determine:

• Is this a medical debt? Look for the original creditor name - hospital names, physician groups, medical centers, or healthcare-related entities.
• Is this a medical credit card or personal loan you used for medical expenses? If so, it is not covered by the medical debt rules and may legitimately appear.
• Is the date accurate? If a collection account shows a “date of first delinquency” more than seven years ago, it must be removed under the FCRA regardless of medical status.

Section 4: Public Records Medical debt can also appear as civil judgments if a creditor sued you and obtained a court judgment. Civil judgments from before 2017 may still appear (though the bureaus removed most judgment data in 2017-2018). A judgment is different from a collection account and may require a different dispute approach.

Monitoring Your Credit Ongoing

In addition to pulling your free reports from AnnualCreditReport.com, consider setting up ongoing credit monitoring. Many banks and credit card issuers now offer free credit score monitoring as a cardholder benefit. These tools typically update your score monthly and alert you to significant changes - new accounts, new collections, significant score drops. They are not a substitute for reviewing your full report annually, but they are a useful early warning system.

The FTC’s guidance on credit freezes and fraud alerts is worth reading if you want to understand your options for protecting your credit from unauthorized access.

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How to Dispute Medical Debt on Your Credit Report

If you find a medical debt collection account on your credit report - whether it is outdated, inaccurate, or simply should have been removed under the new rules - you have a legally protected right to dispute it. The Fair Credit Reporting Act gives you clear mechanisms to challenge information you believe is incorrect.

Step 1: Document What You Found

Before filing any dispute, gather your evidence:

• Print or save a copy of the credit report showing the account in question.
• Note the account name, account number (if shown), reported balance, date of first delinquency, and the reporting bureau.
• Gather any records you have related to the debt: billing statements, insurance explanations of benefits, letters from collection agencies, any evidence of payment.

If the dispute is that a medical collection should not appear under the new rules (rather than that the information is factually wrong), your primary argument is that the account is a medical debt subject to the CFPB’s prohibition.

Step 2: File a Dispute Directly with the Credit Bureau

Each of the three credit bureaus accepts disputes online, by mail, or by phone. Online disputes are typically the fastest. Go directly to:

• Equifax: equifax.com/personal/credit-report-services/credit-dispute
• Experian: experian.com/disputes/main.html
• TransUnion: transunion.com/credit-disputes/dispute-your-credit

In your dispute, state clearly:

1. The specific account you are disputing.
2. The reason for the dispute (e.g., “This is a medical debt account that should be removed under the CFPB’s 2025 rule prohibiting medical debt on credit reports”).
3. Any supporting documentation you can provide.

The bureau is required by law to investigate your dispute and respond within 30 days (or 45 days in some circumstances). If the investigation cannot verify the information, the bureau must remove or correct it.

Step 3: File a Dispute with the Furnisher

In addition to disputing with the bureau, you can dispute directly with the collection agency or other entity that is reporting the account. Under the FCRA, furnishers - the entities that report data to the bureaus - have their own obligations to investigate disputes and correct inaccurate information.

Send your dispute letter to the collection agency by certified mail with return receipt requested, so you have proof of delivery.

Sample Dispute Letter for Medical Debt

Use a letter like this as a template, adapting it to your specific situation:

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[Your Name] [Your Address] [City, State, ZIP] [Date]

[Credit Bureau Name] [Bureau Address]

Re: Dispute of Medical Debt Account - Account Number [XXXX]

Dear [Bureau Name] Dispute Center:

I am writing to dispute the following account appearing on my credit report, which I obtained on [date]. The account listed below is a medical debt account and should not appear on my credit report under the Consumer Financial Protection Bureau’s final rule prohibiting medical debt in consumer credit reports (effective March 2025):

• Original Creditor: [Name of hospital/provider]
• Collection Agency: [Name, if shown]
• Account Number: [as shown on report]
• Reported Balance: $[amount]

Please investigate this account and remove it from my credit report. I have enclosed a copy of my credit report with the account in question highlighted.

If you are unable to verify that this account is not subject to the CFPB’s medical debt prohibition, I request that it be deleted from my file immediately.

Please send me a corrected copy of my credit report upon completing your investigation.

Sincerely, [Your Signature] [Your Printed Name]

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Step 4: Follow Up and Escalate If Needed

The bureau must complete its investigation within 30 days and notify you of the outcome. If the dispute is resolved in your favor, the account will be removed or corrected and you will receive a free updated copy of your report.

If the bureau upholds the account (concludes it is accurate and should remain), you have several options:

• Add a consumer statement to your report explaining the dispute (up to 100 words).
• File a complaint with the CFPB at consumerfinance.gov/complaint. The CFPB actively monitors complaint patterns and can act against bureaus or furnishers that systematically violate the rules.
• Consult an attorney. If a bureau or collection agency is willfully violating the FCRA or the CFPB’s medical debt rule, you may have grounds for a lawsuit. The FCRA allows you to sue for actual damages, statutory damages of $100 to $1,000 per violation, and attorney’s fees.

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Protecting Yourself Going Forward

Even with the protections now in place, being proactive about your medical billing and credit hygiene will serve you well. The rules have changed, but the billing system itself - with its complexity, frequent errors, and aggressive collection practices - has not fundamentally changed.

Request an Itemized Bill for Every Significant Medical Visit

Billing errors are common. Studies consistently find that a substantial percentage of medical bills contain overcharges or errors. Requesting an itemized bill - a line-by-line breakdown of every charge - gives you the information you need to spot problems before a debt ever goes to collections. If you see charges for services you did not receive, duplicate line items, or charges that seem inconsistent with your care, challenge them immediately with the provider’s billing department.

Our balance billing lookup tool can help you understand whether what you were charged is in line with what your plan should have covered.

Know Your Surprise Billing Protections

The No Surprises Act, which took effect January 1, 2022, prohibits balance billing for emergency care and for out-of-network care at in-network facilities in most circumstances. If you received emergency care and are being billed by an out-of-network provider at full rates, you have federal protections. Knowing these protections before you receive a collection notice - or before you pay a bill that you should not owe - can prevent the debt from ever entering the collections pipeline.

Understand Your Grace Period Rights

Under the rules currently in effect, medical debt cannot be reported to credit bureaus until at least one year after the debt first became delinquent. This gives you meaningful time to resolve billing disputes, appeal insurance denials, apply for financial assistance, and negotiate payment arrangements before your credit is affected. Use that time actively.

Ask About Financial Assistance Programs

Every nonprofit hospital in the United States is required by federal law to have a financial assistance program (often called “charity care”). These programs can reduce or eliminate medical bills for patients who meet income eligibility criteria. Many patients who end up with medical debt in collections never applied for financial assistance because they did not know it existed. If you have a large outstanding medical bill, ask the provider’s billing department about their financial assistance policy before assuming you owe the full amount.

Check Your Insurance Coverage Before Assuming Debt Is Valid

A significant portion of medical debt sent to collections involves bills that should have been paid by insurance, were subject to balance billing protections, or reflected services that the patient did not actually owe in the amount billed. Before paying a medical collection - or assuming you owe it - verify with your insurance carrier whether the claim was processed, whether the correct network status was applied, and whether the provider’s bill is consistent with your explanation of benefits. For more on the broader system of medical debt in America, see our article on medical debt in America.

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Frequently Asked Questions

Does medical debt still affect my credit score in 2026?

Under the rules now in effect, medical debt should not appear on your credit report from the three major bureaus (Equifax, Experian, TransUnion), which means it should not affect your credit score. The CFPB’s 2025 final rule prohibits medical debt from appearing on consumer credit reports. If medical debt is currently affecting your score, it may be improperly reported or misclassified - both of which you can dispute.

My credit report still shows a medical collection. What should I do?

First, verify that it is genuinely a medical debt (check the original creditor). Then file a dispute with the credit bureau that is showing it, citing the CFPB’s prohibition on medical debt in credit reports. File simultaneously with the collection agency reporting the account. If the bureau does not remove it within 30 days, file a complaint with the CFPB at consumerfinance.gov/complaint.

Does this apply to medical debt I put on a credit card?

No. If you used a credit card or personal loan to pay a medical bill, that debt is classified as credit card or loan debt - not medical debt. It is not covered by the medical debt credit reporting prohibition and will appear on your credit report and affect your score like any other credit obligation.

Can a collector still call me about medical debt even though it’s off my report?

Yes. The credit reporting rules govern what appears on your credit report - they do not eliminate the underlying debt or the collector’s right to contact you. A collector can still call, write, and in some circumstances sue you over unpaid medical debt. The debt still legally exists; it just cannot appear on your credit report. Engaging with legitimate medical debt proactively - whether by disputing it, applying for financial assistance, or negotiating a settlement - remains the right approach.

My score went up after medical debt was removed. Will it stay up?

Your score should remain elevated as long as your underlying credit behavior stays consistent. The removal of medical collections permanently improves the portion of your score that was being reduced by those accounts. Your score going forward will be based on your current behavior - payment history on other accounts, credit use, length of credit history, new accounts - without the drag of medical collections.

What if the medical debt is from before 2022 - does the rule still apply?

The CFPB’s rule applies to medical debt regardless of when it originated, as long as it falls within the seven-year FCRA reporting window. A debt from 2019 that first became delinquent in 2019 would be reportable until 2026 under the seven-year rule - but under the CFPB’s medical debt prohibition, it should have been removed before that. If you have older medical collections still appearing on your report, dispute them on both grounds: the CFPB medical debt prohibition and the seven-year FCRA limit.

Does the rule apply to dental bills?

The CFPB’s final rule applies to medical debt, which the bureau defines broadly to include debt arising from medical care, medical services, and related services - which includes dental care, vision care, and mental health services. The key is that the debt must originate from healthcare services, not from a general consumer credit product used to pay for those services.

Can I sue a credit bureau or collection agency for violating these rules?

Yes. The Fair Credit Reporting Act allows individuals to sue for violations. If a credit bureau or collection agency willfully fails to correct improperly reported medical debt after you dispute it, you may be entitled to actual damages, statutory damages of $100 to $1,000 per violation, punitive damages in egregious cases, and attorney’s fees. Many consumer law attorneys take these cases on contingency, meaning you pay nothing unless you win. If you believe your rights are being violated and the dispute process is not working, consulting a consumer protection attorney is a reasonable next step.

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The Bottom Line

The transformation of medical debt credit reporting between 2022 and 2025 represents one of the most significant consumer financial protection developments in decades. If you had medical debt on your credit report at any point in the past few years, your situation may have already improved substantially - and if it has not, the tools to fix it are available to you now.

The practical steps are clear: check your credit reports from all three bureaus at AnnualCreditReport.com, identify any medical collections that should not be there, and use the dispute process to get them removed. Review your current medical bills carefully before paying them, know your protections under the No Surprises Act, and ask about financial assistance if you face a large bill you cannot afford.

Medical debt should not define your financial future. The rules now reflect that principle. Make sure your credit report does too.

For more on your rights as a patient dealing with medical bills, see our full Patient Rights Guide. If you are currently dealing with a bill that has already entered collections, our guide on negotiating a bill in collections walks through your options step by step.

You can scan a bill for free now to see what NilesAI finds.