Court Ruling Keeps Medical Debt on Credit Reports

Medical debt will continue to appear on credit reports, following a recent federal court decision that blocked efforts to remove it. 

Earlier this year, the Consumer Financial Protection Bureau (CFPB) introduced a rule to eliminate medical collections from credit files, citing concerns over accuracy and fairness. 

But on July 11, 2025, a judge in Texas struck down the rule, stating that only Congress has the power to act on this issue. The outcome means medical debt will continue to affect credit scores, loan decisions, and access to affordable housing.

Why Medical Debt Is Still a Problem

Medical debt often stems from emergencies, billing errors, or insurance delays. Unlike other types of debt, you might not even know it’s there until it appears on your credit report. 

According to the CFPB, roughly one in five Americans has a medical collection on their credit report. These debts make up more than half of all collections listed, with the impact hitting hardest in communities with limited access to care or insurance.

There has been some progress. Paid medical collections and those under $500 no longer show up on reports. Still, larger unpaid balances remain on reports and they can make it harder to qualify for a mortgage or secure lower rates.

How to Offset the Impact

While medical debt may stay on your credit report, there are still ways to strengthen your credit profile and build your score.

One of the most effective is rent reporting. Rent is typically your largest monthly expense, yet it is rarely included in your credit file. That means many renters miss out on an opportunity to show a history of consistent, on-time payments.

Services like RentReporters help solve this by verifying your rent payments and reporting them to all three major credit bureaus. This adds a new tradeline to your credit report and may improve your score in as little as 10 days, depending on your credit profile. 

For those dealing with medical debt, adding positive payment history can help offset its impact and strengthen your position when applying for loans, refinancing, or securing housing. 

What You Can Do

Medical debt will remain on credit reports unless Congress takes action. While the CFPB attempt to remove it was blocked, you still have control over steps that can improve your credit standing. 

Reporting you rent, paying down existing debts, or using a secured credit card are all steps that can help you build your credit.

Start with the bills you already pay, like your rent, and make them work for you.

Learn more about RentReporters and how to get started today.