Buying a Home

Medical debt keeping you from buying your dream home? Not anymore. The big three credit bureaus (Equifax, Experian and TransUnion) announced that changes are coming to medical debt reporting beginning July 1, 2022.

According to a Consumer Financial Protection Bureau (CFPB) report, medical debt is the most common tradeline (credit account) on consumer credit reports making up 58% of third-party tradelines. As a result, many borrowers miss out on getting a home loan due to the impact medical debt has on their credit score, even if they have paid it.

With the changes to medical debt reporting, borrowers could have an easier time applying for a mortgage.


As of July 1, 2022, medical debt that’s been paid after being sent to collections will no longer be included on consumer credit reports, no matter how long the debt has appeared on your report. Existing paid medical collections will be removed as well.

The amount of time before medical debt collections appears on your credit report will be increasing. Currently, the collections appear after six months but in July that will change to one year, giving people more time to pay down medical debt or devise a payment plan.

The last change will happen a little further down the road, but it is still beneficial to borrowers. Credit reporting agencies won’t include medical debt in collections under $500 on credit reports beginning in 2023. This is subject to change as more research is done between now and then.


There are many aspects to understanding your credit score. One thing borrowers may not realize is just how long medical debt stays on their credit report, even if they have paid it off. If you had medical accounts sent to collections, it stays on your credit report for seven years. However, with the changes coming in July, that won’t be an issue.

Since credit reporting agencies won’t be including paid medical debt, you won’t have to worry about a bill you paid in 2016 hurting your credit score today. Considering any collection account can drop a credit score by at least 100, this is a boon for borrowers who don’t have any other debts.

If these changes make it possible for you to finally take a step toward homeownership, our loan officers can help guide you the rest of the way. Connect with a PrimeLending, a PlainsCapital Company® home loan expert today.

Written By Becky Bruning