How medical bills affect your credit report is one of the most common questions Key Credit Repair receives from clients. When medical bills appear on your credit report, you don’t want to ignore them because this can create a problem with your credit standing. If you’ve found you are concerned about unpaid medical bills appearing on your credit report, here’s what you can do.
Obtain Proof of What You Owe
If a medical provider or healthcare facility reports a debt, always ask for a detailed account of the bill to determine how the medical bills may affect your credit report and if you actually owe money. Also, compare the details within the Explanation of Benefits (EOB) provided by your insurer to ascertain you aren’t billed in excess of what insurance says is your portion of the bill. Many people assume insurance paid and that ends debt obligation, but billing errors or extra charges sometimes occur which, if gone unpaid, will likely be reported to credit reporting agencies.
Double-Check With Insurance Company
Medical bills often land in collections because patients don’t realize they owe money. The most common reason is related to insurance, including coding errors. So, how do medical bills affect your credit report, and what can you do? Once an overdue medical bill appears on your credit report, the first step is to call your insurance company. Determine why the bill wasn’t paid and/or ask if they’ll pay the bill. It’s possible the bill slipped through the cracks after services were provided. Credit bureaus usually remove blemishes from a credit report once the insurer pays.
Pay Off the Medical Bill
As of 2017, the three major reporting agencies, Experian, Equifax, and TransUnion, don’t list medical bills on a credit report for 180 days. This gives consumers time to rectify outstanding (confirmed) charges. In the event the healthcare facility hasn’t yet sent the debt to a collection agency, before the 180-day mark, contact them to ask how medical bills affect your credit report, establish a payment plan, or about reducing the debt. They might be willing to lower the debt or structure a payment plan. When medical debt is paid off before going to collections, it’s often removed from a credit report.
Keep Consistently Good Credit Habits
Once your credit score drops due to medical (or other) debt, strive to lessen its impact by keeping up to date on your other bills. By keeping consistently good credit habits, you can help your credit score rebound.
Dispute Erroneous Debt
In some instances, unpaid medical bills are errors. The Consumer Financial Protection Bureau was asked if medical bills affect your credit report, and their answer was one in five people have medical bill errors on their credit reports. Always check the accuracy of any unfamiliar debt on your credit report. Even if it’s an error, this entry can still negatively impact your credit score if it’s not disputed and corrected.
Payment history is one of the primary factors that help determine a credit score. While medical bills aren’t weighted as much as other types of debt delinquencies, they can negatively impact credit scores. Delinquent debt typically stays on credit reports for up to seven years from the date the debt was reported as unpaid. This can have an impact on your ability to get a loan or gain access to favorable credit terms.
Do medical bills affect your credit report? Key Credit Repair will help you to fix your credit and get you back on track! Work with a reputable credit repair expert, call us today for a free consultation at 877-842-5215!