The aim of this study was to compare a dimensional and a categorical approach to diagnosis, using as an illustration co-occurring symptoms of anxiety and depression concerning description, associations and predictive power. We analysed data from 60 869 individuals with valid ratings on the Hospital Anxiety and Depression Scale (HADS) and on mental impairment in the age range of 20 to 89 years of the cross-sectional Nord-Trøndelag Health Study 1995–1997. There was a wide variation of the dimensional symptom level (subscale scores) within both diagnostic categories (cut-offs ≥8 on both subscales), as is usually true with categorical and dimensional diagnosis. The dimensional (Spearman) correlation coefficients between anxiety and depression was 0.51 compared to 0.38 for the categorical. The power to predict impairment was weaker with the categorical than with the dimensional approach of the HADS, showing fewer statistically significant coefficients in the logistic regression models and lower area under curve (0.82 versus 0.87). This is an example illustrating the impact use of dimensional diagnoses would have on research and clinical practice. Copyright © 2009 John Wiley & Sons, Ltd.