Do Medical Bills Affect Your Credit? What You Need To Know About Medical Debt On Credit Reports
Do medical bills affect your credit score? You may be surprised to learn, that medical debt on credit reports can be a big issue for your score. The worst part is that paying medical bills on time is seldom reported to the credit bureaus, while late payments or other account issues are reported. It’s a double whammy.
Your score is calculated from the information in your credit report. The credit bureaus that maintain your report do not have an army of spies that constantly see how you are spending your money. Instead, they rely on lenders to send the credit bureaus information about your accounts with them. While lenders like financial institutions almost always report account information, medical professionals and facilities don’t usually bother unless you are late in your payments. They do this as a way of enticing you to pay. If you have good credit, you don’t want it ruined by medical debt on your credit report, so you would pay as soon as possible.
Unfortunately, late, or unpaid medical debt on credit reports reduces your score a lot. To avoid black marks on your credit report, the main key is to keep in contact with your creditors. Often, they will refrain from reporting anything to your report as long as you stay in contact and make minimum payments.
The first step in protecting your credit score is to ask your creditors to send you an itemized bill for services. Often, in the course of providing the itemization, your bill may be lowered.
Medical professionals and their offices know that if they send your bill to collections, they will only get a fraction of the amount they are owed. That means that you might be able to offer to pay a smaller amount of the total owed in exchange for deleting negative information from your credit report, which can protect your score.
In the end, do medical bills affect your credit? Yes, medical bills affect your credit score like any other bill.