Can I get a personal loan if I have medical debt in collections?

2023-2024 medical collections changes to credit reporting: Under $500 medical collections: completely removed from all three bureaus' credit reports in 2023. Medical debt under 1 year old: removed from all three bureaus' reports (previously it appeared after 6 months). Paid medical collections: removed (previously stayed for 7 years even after paid). Result: the impact of medical collections on credit scores and loan eligibility dropped significantly. Many borrowers who had scores suppressed by small medical collections saw score improvements of 20-40 points.

What remains: Unpaid medical collections over $500 that are more than 1 year old still appear on credit reports. These continue to impact credit scores. The CFPB has proposed additional rules to further limit medical debt reporting, but as of 2026 final implementation is uncertain.

Lender treatment of medical collections: Major direct lenders (SoFi, Lightstream, Marcus) typically have automated underwriting that follows bureau scores closely - medical collections remaining on the report will affect rates and eligibility. Mid-tier lenders (Avant, Upgrade, LendingClub) tend to do manual underwriting and often apply lower negative weight to medical collections. Credit unions: relationship-based lending; medical collection context (major illness, billing dispute) can be explained during the application.

Action steps: Pull your credit reports first and confirm which medical collections (if any) still appear under the new reporting standards. If older paid collections still appear, dispute with the bureau - they should have been removed. Apply to lenders known for less restrictive medical debt policies.