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Most Medical Debt Has Disappeared From Your Credit Report



On July 1, your credit score might have gone up. If you have unpaid medical bills under $500, chances are those were removed from your credit reports.

But how much you benefit might depend on where you call home, according to a new study from WalletHub. Virginians stand to benefit more than Californians, on average.

The personal finance site listed four Virginia cities in the top 10 to benefit the most in its “2022’s Cities Benefiting Most & Least From Medical-Debt Credit Report Changes” study. Four California cities make up the bottom 10.

The difference wasn’t just how much medical debt those residents were burdened with, it was also how many of those residents had those debts sent to collections.

So in a way, Californians won’t benefit as much from the recent changes because they had less medical debt to start. In fact, looking at the cities that way leads to this conclusion: Smaller cities and rural residents struggle with medical debt more than those in big cities and urban areas.

Here are the Top 10 cities in WalletHub’s survey:

1. Norfolk, Va.
2. Newport News, Va.
3. Gulfport, Miss.
4. Huntington, W.Va.
5. Amarillo, Texas
6. Casper, Wyo.
7. Columbia, S.C.
8. Chesapeake, Va.
9. Columbus, Ga.
10. Virginia Beach, Va.

None of the cities in the top 10 have a population over 250,000, aside from Virginia Beach; an outlier with about 450,000 residents.

Meanwhile, the Bottom 10 includes major urban areas, mostly along the east or west coast.

173. Pearl City, Hawaii
174. Glendale, Calif.
175. Warwick, R.I.
176. Boston
177. San Jose, Calif.
178. Fremont, Calif.
179. Minneapolis
180. San Francisco, Calif.
181. St. Paul, Minn.
182. New York

A national map shows where people struggle with medical debt most:

Why the difference?

It has a lot to do with access to resources, says Jill Gonzalez, a financial industry analyst and WalletHub spokeswoman.

“The cities that benefit the most from these changes tend to be smaller ones where there are a lot more people who have medical debt in collections,” Gonzalez says.

“Larger cities, where people have higher incomes and more health insurance coverage benefit less from these changes,” Gonzalez continued. “There are simply fewer people here with medical debt in collections.”

Americans have racked up $195 billion in medical debt, with about $88 billion of which impacted people’s credit scores, according to the Consumer Financial Protection Bureau.

For many, that means being saddled with anywhere between $1,000 and $5,000 worth of healthcare debt, says’s research.

Take a scalpel to medical debt

The CFPB has argued people’s ability to pay their mortgages and credit card bills are better predictors of someone’s ability to pay back a loan or debt than medical bills.

The changes from the credit bureaus mean about 70% of medical debt will be removed from people’s credit scores. Prior to these changes, medical debt remained on credit reports for seven years, even if it was paid off.

“This means that anyone who has paid off their medical debt collections will no longer have it on their credit report,” Gonzalez said. “At the same time, any medical debt of $500 or less and any medical debt less than a year old will not show up on people’s credit reports and will not affect their scores.”

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