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How Medical Debt Can Impact Your Credit Score

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Just when you think medical debt can’t get any worse, it causes your credit score to drop. That’s right — unpaid medical bills can affect your credit scores. Typically, doctors and hospitals don’t report debts to credit report agencies.

Rather, they turn their unpaid bills over to a debt collector and it is the collection agency that reports them. It’s no surprise that debt collection of any time can cause your credit to take a huge hit. In fact, just one collection account can cause a good credit score to drop 50 to 100 points.

Although this huge hit won’t last forever and, unless there’s new negative information, your score should steadily improve over time, collection accounts, including medical debts, can remain on your credit report for seven years from the date of the original delinquency. That waiting period holds true for both paid and unpaid accounts (with few exceptions). Here’s how medical debt can impact your credit score.

Will a Medical Debt in Collections Really Hurt My Scores?

You have many different credit scores, not just one, and they can all be impacted in different ways. The newest version of the FICO score, FICO 9, ignores paid collection accounts, and medical collection accounts carry less weight under that model. On the other hand, the most widely used FICO model is FICO 8, which looks at any small collection account if the original balance is more than $100. This is good news for small medical bills, but not for most.

Meanwhile, the Vantage Score 4.0 distinguishes medical collections from other types of collection accounts, penalizing medical collections less than non-medical ones. It also ignores medical collections less than six months old.

Although some credit scores make life a bit easier for those with medical debts, many lenders still use older versions of credit scores that don’t give medical collections any special treatment. For that reason, assume that if you find a collection account on your credit report, it will likely be negatively viewed when applying for credit, insurance or loans.

Final verdict? Medical debt in collections can hurt your credit score, some scores more than others. The damage can also be worsened if your lender is using older versions of credit scores. Medical debts don’t have to destroy you or your credit.

Here are few steps you can take to minimize the negative impact.

1. Stay on Top of Your Medical Bills

Thanks to co-pays, deductibles and other insurance quirks, many medical debts go unpaid simply because a person doesn’t know they owe. Follow up with your healthcare provider or insurance company after doctor or hospital visits to see if you have a balance. Even if you have good health insurance, don’t assume everything will be taken care of. A helpful tip is to add “Check balance!” to your calendar a week and a month after each medical appointment or surgery you have. This will help remind you to keep up with recent balances and pay them off as soon as possible.

On the plus side, you have more time before medical debt is reported to credit bureaus than you did a few years ago. The three major credit reporting agencies won’t report medical debt until 180 days until after it incurred, giving you more time to resolve medical bills with health care providers and insurance companies.

2. Review Your Explanation of Benefits (EOBs)

EOBs are statements from health insurance companies that detail what medical services and treatments have been paid for on their behalf. It also includes any balance you’re responsible for paying. Take the time to carefully read these and to contact the provider and your insurance company quickly if a bill is not being taken care of.

3. Ask for an Itemized Bill

A bill that lists out what you’re being charged for is a lot easier to verify and understand than a lump sum. An itemized bill will help you verify that you’re being charged correctly and provide an opportunity for you to negotiate payment with the health care provider.

4. Negotiate With Collectors

If you are contacted by a collection agency about a medical bill, ask them not to report it if you pay it right away. Some won’t report if the bill is resolved quickly. Also ensure it’s really a bill you owe and not a scam.

Again, having a collection account updated as paid generally will not help your scores, unless a lender is using one of the newer credit score versions. So, if possible, aim for removal of the item from your credit report. Some agencies will work with you, others won’t.

If you feel the situation is highly unfair — for example, you never received a copy of the bill — you can try two things. One is filing a complaint with the Consumer Financial Protection Bureau. The other is contacting the original provider and try to get them to pull it back from collections so you can pay them directly. If they do, the account will usually no longer be reported.

5. Check the Accuracy

Call your doctor’s office to verify that a bill was sent to an insurance company. Ask your insurance company if certain costs were supposed to be covered and weren’t. Actively taking part in your insurance and bills can prevent expensive mistakes from happening and can prevent you from being left with bills you might not need to pay.

If a bill doesn’t seem right, check its validity. If you are contacted by a collection agency and you don’t believe you owe the bill, you have the right under the federal Fair Debt Collection Practices Act to ask the collection agency to validate the debt. You also have the right under the Fair Credit Reporting Act to dispute it with the credit reporting agencies reporting the account.

6. Work on a Payment Plan

If you know ahead of time that you won’t be able to pay a bill in full and on time, contact the medical provider and try to work out a payment plan. If the bill has not yet been handed over to collections, this is a great option. If the bill has already been given to collections, it’s asking if the medical provider will take the account back in exchange for payments is worth a shot.

7. Keep an Eye Out for Medical Debts

It can be easy to miss medical debts and charges when you’re not actively keeping an eye out for them. Oftentimes you won’t know a medical debt is owed until it goes to collection and it’s much easier to deal with debts when you can tackle them first. That’s why it’s critical that you review your credit reports annually, and monitor your credit scores on a regular basis.

Think of it as a checkup for your credit health. You can get a free credit report snapshot and two free credit scores on

Paige DiFiore contributed to this article. This article has been updated. This article was originally published December 8, 2016. 


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