Medical bills can be a real headache. They often come when you least expect them, and sometimes they're just plain confusing. What's even more frustrating is when these bills end up on your credit report and hurt your credit score. 

Fortunately, you're not entirely powerless in this situation. There are steps you can take to challenge and potentially remove inaccurate medical bills from your credit report. 

How Medical Bills End Up on Your Credit Report

So, how exactly do medical bills land on your credit report? 

It's not always a straightforward process. 

Usually, doctors and hospitals don't report every missed or late payment to the credit bureaus. They're typically more focused on providing healthcare, not acting as a credit reporting agency. 

Instead, they often wait until you've missed several payments, and then they might send your debt to a collection agency. The first time you might see a medical bill on your credit report is often when it's already in collections. This is when medical debt can damage your credit.

When You Can Remove a Medical Bill From Your Credit Report

Not all medical debt should appear on your credit report. There are specific situations when you can take action to remove them. 

For example, unpaid medical debt should NOT be reported to the credit bureaus until it has been in collections for at least a period of one year. This grace period allows you to correct any billing errors and allows time to work out a payment plan. 

Also, as of July 2022, paid medical collection debt and medical collection debt under $500 should no longer appear on credit reports. 

How to Challenge Medical Bills and Collections on Your Credit Report

If you spot a medical bill on your credit report that you think is wrong, unfair, or unsubstantiated, you have the right to challenge it. 

#1. Demand Validation from the Collection Agency

First things first, you should contact the collection agency. 

Send them a letter requesting validation of the debt. Ask them to prove that the debt is actually yours. You can also include in your letter that you want the collection to be removed if it's not validated within 30 days.

#2. Break Out the Magnifying Glass and Look for Errors

If step one doesn't get the results you want, it's time to scrutinize your credit reports. Get copies of all three of your credit reports from Equifax, Experian, and TransUnion. Review every detail carefully related to medical bills. 

Look for any inaccuracies, even minor ones, like dates, names, or balances owed. 

If you find any errors, you can dispute them with the relevant credit bureau. The credit bureau will then investigate the errors, and if they can’t verify the information, they will remove the medical collection from your credit report.

How Medical Collections Affect Your Credit Score

A medical debt in collections can indeed hurt your credit score. 

However, the most recent scoring models, like VantageScore 4.0 and FICO 9, give medical debt less weight than other types of debt. Also, if the unpaid balance in collections is less than $500, the account won't appear on your credit reports at all.

But, not all lenders use these newer models. So, medical debt in collections may still have a serious impact in the case of some lenders. 

General medical debt does not show up on credit reports. However, medical debt that has not been paid, is currently with a collection agency, and more than 365 days past due will show up on your report.

When Do Medical Collections Appear on a Credit Report?

Medical collections won't show up on your credit report right away. The top three credit reporting agencies typically wait for a year before they decide to update unpaid medical collection accounts in an individual’s credit history. 

As discussed above, this one-year grace period gives you time to sort out billing errors, pay your bill, or work with your insurance company. 

If you take decisive action within this period to improve your credit score, you can avoid having unpaid medical collection bills added to your report. 

But, if the bill is still unpaid after 365 days, it may be added to your credit file and could stay there for seven years.

Strategies to Prevent Medical Collections on Your Credit Report