Medical debt burdens families and individuals and can pose a major barrier to financial security. Medical debt in collections reported on a credit record can affect credit scores, lowering the ability of consumers to qualify for loans, credit cards and housing. According to the National Consumer Law Center, medical debt is the leading driver of personal bankruptcy and has become a crisis across the nation.

In 2025, 6.3% of Arkansans had credit bureau records showing medical debt in collections, down from almost 18% in 2022 but higher than the national rate of 3.2%. This sharp decline occurred as major credit bureaus changed reporting requirements for medical debt, removing paid medical collections and not including unpaid medical collections until they were a year old (up from six months). These changes benefit those with medical debt, which is a poor predictor of credit risk and often due to problems navigating complex billing and insurance systems, according to the Urban Institute.

Among counties in the state, the rates were highest in Chicot (17%) and lowest in Searcy (2.9%) and Prairie (3%). Communities of color in Arkansas had a slightly higher rate of medical debt (7.0%) compared to 6.2% among White communities.

Disparities in levels of medical debt borne by people of color, particularly Black and African American residents, are connected to structural barriers and systemic racism within the housing, credit, employment and insurance systems. Structural barriers and systemic racism in housing, credit, and employment opportunities increase financial vulnerability, making it more difficult for households of color to manage medical bills and pay debts on time.

It is important to note that though less medical debt is impacting credit reports, consumers with medical debt can still, in most cases, be sued by providers.

Communities were designated as white or of color based on zip code and a threshold of 50%. Therefore, a community where 50% or more of residents are people of color was considered a community of color. People of color were defined as those who are African American, Hispanic, Asian or Pacific Islander, American Indian or Alaska Native, another race other than white, or multiracial.

The data on debt comes from a 4 percent nationally representative panel of deidentified, consumer-level records from a major credit bureau.