Home > Managing Debt > Can Medical Debts Prevent You From Getting a Job?

Comments 0 Comments

It’s perhaps one of the cruelest situations in which to find oneself: recovering from an illness or injury, or coping with a disability that involves expensive medical treatments; trying to get back to work, but unable to do so because of your medical bills. That scenario is perhaps not as far-fetched as it may sound.

Consider that Federal Reserve researchers found in a 2003 study that more than half of collection agency accounts and nearly one-fifth of lawsuits listed on credit reports are for medical debts. While not all employers check credit, plenty do. Some 13% of organizations polled by the Society for Human Resource Management (SHRM) conduct credit checks on all job candidates, while another 47% consider the credit history of candidates for select jobs. (Four out of ten do not conduct credit checks.)

“There’s a perception that medical debt is somehow treated differently than other debt,” says Mark Rukavina, executive director of the healthcare research and advocacy organization The Access Project. “But I don’t think (employers) peel back the onion far enough to see where the debt came from. The problem is that virtually all of the medical data on credit reports is there because it’s been reported by a collection agency makes it very difficult for an employer to distinguish (it from other debt).”

[Related Reader Question: How Can I Remove a Medical Collection Account From My Credit Reports?]

The perception described by Rukavina seems common. The internet is rife with articles and opinions stating that medical debt doesn’t affect credit the same way as other debt. (I may have even said that at some point.) Citing the results of a survey about the use of employer background screening tools, SHRM stated that “Medical debt is not considered during the hiring process.”

But if that information appears on credit reports, how can we be certain it’s not considered?

I decided to try to confirm whether medical debts are somehow excluded from credit reports employers receive. Yet, when I tried to find any evidence of that, I came up empty-handed. I checked with the Consumer Data Industry Association (CDIA), which referred me to the individual consumer reporting agencies. I also checked with the National Association of Professional Background Screeners to see if they had additional information, but they referred me back to CDIA.

[Tool: Quickly assess your risk of identity theft for free]

TransUnion and Equifax did not reply to my repeated requests for information. Experian responded promptly to my query, however, and spokesperson Rod Griffin told me:

Medical collection accounts will appear on Experian credit reports for employment and insurance purposes. However, the financial obligation will show only as “medical collection.” There will be no information that would indicate the kind of treatment received, the type illness that was treated or other information that would divulge private medical information.

He also added that:

Credit scores are never used in employment decisions, and the report employers receive has a number of differences, such as account numbers being truncated or omitted, birth date removed, and so on to ensure consumer privacy and compliance with EEOA regulations.

This brings us back to my question, “Can medical debt keep you from getting a job?” The answer appears to be “yes.” And that’s where it gets tricky.

Robert Miller, a human resources director who serves on SHRM’s Special Expertise Panel for Employee Health Safety and Security, told me that medical debt can affect someone’s ability to get a job. “But that doesn’t necessarily mean it will,” he cautioned.

He explained, “It may be a protected class issue with regard to Americans with Disabilities Act or Family and Medical Leave Act.” Miller, who helps write questions for certification exams for human resources professionals, says that employers can ask prospective hires about medical collections on their credit reports, but must comply with those laws. They can say, “What happened here?” But “they cannot ask about the illness or the diagnosis,” he states.

[Featured Product: Research and Compare Identity Theft Monitoring Services on Credit.com]

A Discussion You Do Not Want to Have… »

Image: Brandi Jordan, via Flickr.com

Pages: 1 2

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team