Got a $380 ER bill sitting in collections? It shouldn't be on your credit report at all. A $3,000 one you've paid off? That shouldn't be there either.
Those protections are still alive, even though the big federal rule isn't. Here's the scorecard.
What happened to the federal ban
In January 2025, the CFPB finalized a rule to remove medical bills from most credit reports. That July, a federal court in the Eastern District of Texas vacated it in Cornerstone Credit Union League v. CFPB, finding the Bureau had exceeded its authority under the Fair Credit Reporting Act (CFPB). The rule never took effect.
Then in October 2025, the CFPB issued an interpretive rule saying the Fair Credit Reporting Act generally preempts, or overrides, state laws that restrict what goes on credit reports (Federal Register). That's aimed squarely at the states that passed their own medical debt bans. A law firm analysis counted sixteen of them (Goodwin).
Translation: don't count on Washington or your state to scrub medical debt from your report. But don't panic either.
The 3 protections still in place
These come from the three big credit bureaus themselves, Equifax, Experian and TransUnion, and they're still in effect (joint announcement):
- Paid medical collections come off. Since July 1, 2022, medical collection debt paid in full is no longer included on credit reports.
- Small medical collections don't show up. Since April 2023, medical collections with an initial balance under $500 aren't reported. The bureaus said that removed nearly 70% of medical collection accounts from credit files.
- You get a full year. Unpaid medical collections can't appear on your report until a year has passed, up from six months. That's time to sort out insurance errors or set up a payment plan.
Run the numbers
How each scenario plays out under the current rules:
| Your medical bill in collections | Shows on your credit report? |
|---|---|
| $380, unpaid | No (under $500) |
| $1,200, unpaid, sent to collections 4 months ago | Not yet (one-year wait) |
| $1,200, unpaid, more than a year in collections | Can appear |
| $3,000, paid in full | No (paid medical collections are removed) |
Fee check
- "Medical debt removal" services: you can dispute errors with the credit bureaus yourself for free. You don't need to pay anyone to do it.
- Paying with a credit card: turning a medical bill into card debt at 20%+ APR can cost more than a payment plan with the provider. Ask the provider what plans it offers first.
- Collection accounts: ask for an itemized bill and check that insurance was billed correctly before you pay.
What to do if medical debt is on your report
- Pull your reports. You can get free reports from all three bureaus at AnnualCreditReport.com.
- Look for anything that shouldn't be there: paid medical collections, ones under $500, or any less than a year old.
- Dispute errors directly with the bureau showing the item. Include proof of payment if you have it.
- Paying a medical collection gets it removed, so if you can afford to pay it off, that's a direct path to a cleaner report.
Do this today: pull your free credit reports and search for "medical." If you see a paid or under-$500 collection, dispute it this week.
Sources
- Consumer Financial Protection Bureau, CFPB finalizes rule to remove medical bills from credit reports , January 7, 2025 (rule vacated July 11, 2025)
- Federal Register, Fair Credit Reporting Act; Preemption of State Laws , October 28, 2025
- Equifax, Experian and TransUnion, Medical collections debt under $500 removed from U.S. credit reports , April 11, 2023
- Goodwin Procter, CFPB issues rule that FCRA preempts state measures barring medical debt , November 2025
This article is for general information, not legal or individual financial advice. Rules on medical debt reporting are in flux; check the latest before acting.