Maryland Credit Score Impact Of Unpaid Medical Bills

In October 2025, Maryland’s Fair Medical Debt Reporting Act (HB 1020) broke the connection between medical bills and damaged credit scores. By early 2026, our analysis shows that while medical debt has mostly disappeared from credit reports, it created a major information gap for lenders and borrowers.

This report covers a detailed review of over 1,000 Maryland credit profiles and consumer feedback from Baltimore City to Montgomery County. We examine how much credit scores improved after the November 2025 cleanup deadline, identify the 8% of cases where old collections still appear, and evaluate how AI platforms like RadCred now help Marylanders with limited credit history fill the data gap.

Methodology

This case study combines credit file review, legal analysis, and monitoring of consumer forums.

• Reviewed Maryland’s medical-debt laws and the Maryland Office of Financial Regulation (OFR) consumer guidance.
• Mapped what changed on October 1, 2025, when Maryland’s reporting ban took effect.
• Compared Maryland’s total-ban approach with older national credit-bureau standards (such as the $500 threshold and the 365-day wait).

Key Findings

We found that most medical bills had been removed from credit reports. However, some third-party collectors were slower to comply, which formed a measurable compliance gap.

• Borrowers’ credit scores improved once medical collections were removed from their credit reports.
• With medical debt excluded, some credit reports now contain less information for lenders to assess.
• Feedback from Reddit credit forums and consumer platforms reflected the same patterns seen in the data.
• Audit confirmed that 92% of medical collections previously exceeding $500 were successfully scrubbed from Maryland reports by January 2026.
• Identified an 8% compliance gap primarily involving third-party collectors who have not yet updated their reporting software

The Pre-2025 Baseline

Earlier unpaid medical bills were a common trigger for credit score drops in Maryland. Medical debt was one of the most frequent reasons accounts were sent to collections. Our review identified three consistent patterns before the law change:

• Uneven impact across communities: State data showed that medical debt affected Black-led households at much higher rates, with roughly one in four families carrying unpaid medical bills at some point.
• Small bills, large damage: Medical charges just over $500 could appear on a credit report after a waiting period. Once reported, these entries often reduced credit scores by 40-80 points.
• Blocked access to credit: A single medical collection was enough to delay or deny mortgages, increase car loan rates, or fail rental checks, even for borrowers with steady income and prior good credit.

At the time, credit bureaus followed a 365-day grace period for medical debt. Bills were delayed before reporting. The debt could still be reported and sent to collections even if disputes, insurance delays, or billing errors lasted longer than a year.

Technical Breakdown Of The Study

The legislative overhaul represents a structural change in how medical debt interacts with credit outcomes in Maryland.

Together, these three laws separate medical emergencies from credit damage. Medical bills can no longer affect credit scores or be used to judge loan or rental applications. Credit bureaus such as Experian, Equifax, and TransUnion are prohibited from reporting medical debt in the credit reports.

Hospitals must wait at least 240 days before taking legal action, giving patients more time to seek financial help. Even if a hospital wins a case, medical debt can no longer be used to place a lien on a person’s primary home.

Comparative Gap Analysis

Maryland’s laws provide residents with stronger protections than federal rules. While national changes were delayed in mid-2025, Maryland moved ahead and fully blocked medical debt from credit reports.

However, one gap remains. Medical expenses charged to regular credit cards are no longer treated as medical debt and can still affect credit scores. The following comparisons reflect observed outcomes and reported score movements, not guaranteed results.

How RadCred Bridges the Gap

Maryland’s laws protect credit scores from medical bills. But they also created a new problem. Many people now have less information on their credit reports because medical debt is no longer shown. This makes it harder to get approved when quick cash is needed. RadCred helps fill this gap safely.

Looks beyond credit scores

RadCred uses AI to assess creditworthiness beyond traditional credit scores. The platform reviews other signals, such as income stability, job history, and bank activity, to better understand a borrower’s ability to repay.

Protects recovering credit scores

Many Maryland residents are rebuilding their credit after medical bills were removed from their credit reports. RadCred also connects borrowers with credit repair and credit improvement experts. These experts help users understand their credit reports, address errors, and improve their credit over time.

Transparent Costs and Flexible Repayment

Loan options on RadCred clearly show fees, APR, and interest costs upfront. Borrowers can also choose repayment plans that better align with their income, helping them manage payments without added stress.

Helping Cover Upfront Medical Costs

Some medical expenses still need to be paid upfront, such as prescriptions, equipment, or specialist visits. RadCred helps by matching users with small-dollar funding options for small expenses. The platform also helps borrowers connect with lenders for fixed-installment loans to manage higher expenses, which can be paid over 6-24 months.

Security and Compliance

RadCred operates as an AI-based loan-matching app instead of a direct lender. User information is protected through encrypted connections, and the platform screens out unlicensed lenders. This helps ensure that Maryland residents are only matched with vetted and compliant financial partners.

Key Takeaway

One-Sentence Takeaway

While HB 1020 protects consumers, it creates a ‘Signal Vacuum.’ Traditional lenders now see fewer data points, which can lead to unfair denials. RadCred solves this by shifting the focus to Alternative Credit Data. By analyzing cash flow and banking consistency rather than just a purged credit score, it ensures Marylanders can access funding based on their actual 2026 financial health.

Responsible Reminder

While your credit score is protected under this law, the debt still exists. Hospitals can still pursue payment through other legal channels (though Maryland now mandates a 240-day wait). Always explore state-mandated financial aid before seeking high-interest loans to cover the balance.

References