Medical Debt on Credit: Unpaid medical bills, like any debt, will hurt your credit score and hinder your ability to borrow, buy property, or get a job. Medical debt carries a particular risk: payment history is the most important factor in credit scoring— essentially how you pay bills on a regular basis on time.
If you stop paying large healthcare bills as a result of lengthy negotiations with providers and insurers, your credit may be tarnished as a result.
Medical debt does not affect your credit score unless it is reported to a credit office, and according to the National Consumer Law Center (NCLC), virtually no hospital or medical provider will report the debt directly.
We could sign it over to a collection agency, though, which could document it. Nearly 30 percent said the bill ended up with a collection agency in a 2018 Consumer Reports survey of adults who had recently faced a large health care expense. You may not even know that until you hear from the agent, you’re delinquent.
Frequently Asked Questions About Medical Debt
Do unpaid medical bills affect your credit?
Of example, your credit score and your ability to apply for future credit can be impacted by unpaid bills. The key is whether the provider turns your bill over to a collection agency for your inability to pay results. The debt would probably appear on your credit report in that situation.
Medical debt refers to health-care bills, such as visits to emergency rooms, surgery costs, and visits to doctors. The most medical debt difficulty is that it is largely unexpected — no one plans to get sick or injured.
If your emergency medical needs urgent care, even if you have insurance, heavy medical bills can find their way to your doorway.
How long does it take for unpaid medical debt to end up on my report?
As of September 2017, most unpaid medical debt is subject to a waiting period of 180 days before it’s added to your credit report. That is a great news if you’re worried about medical bills affecting your credit score.
This six-month grace period could be just the time you need to sort through the claim with your insurance company or arrange payment alternatives with your medical provider.
What if my insurance never paid my medical bill?
The effect on your credit depends on the credit scoring model used by a potential creditor. Most lenders use the FICO 8 model, which treats bills in collections the same, regardless of whether the bill is paid.
However, the FICO 9 and VantageScore 3.0 models waive settled collection accounts, which might work in your favor if you cleared the debt since.
What steps can I take to dispute inaccurate medical bills on my credit report?
If you suspect your score is low because of a medical bill, work to remedy the issue in three steps: 1. Get a copy of your credit report. If an unpaid medical bill shows up on your credit report after you’ve cleared the debt, gather documentation that proves the bill was paid, such as receipts or account statements. 2. Contact the bureaus. Let Equifax, Experian and TransUnion know about the error on your credit report by mailing a formal letter or by submitting a dispute form on their sites. 3. Follow up. You should receive a response from the bureaus within 30 days after submitting your dispute. Confirm that the corrections are reflected on your credit report before letting the matter rest.
Where can I get help paying my medical bills?
If your insurance doesn’t cover your bill or you’re having trouble paying out of pocket, resources are available to alleviate your medical debt:
Nonprofit hospitals. If you’re a qualifying low-income family, a nonprofit hospital might help cover the expense. You may need to show proof of income in the form of tax returns or pay stubs.
Local human-service agencies. State-run health programs sometimes help supplement the cost of medical expenses. Research what’s available in your neighborhood through your city or county offices.
The United Way. Call 2-1-1 from anywhere in North America to learn more about this nonprofit’s healthcare support system. Its advisers can point you in the direction of local services near you that may be able to help.
4 Tips to Keep Medical Bills off Your Credit Report
Ways that you can keep your doctor bills off your report include:
Review your explanation of benefits (EOB). An EOB often arrives before your medical bill, detailing the expenses your insurer covers. When you know about expenses beyond your bill, you can better plan how you’ll pay them when they come due.
Review your medical bill. If you haven’t received one, request an itemized bill from your medical provider. That way, you’ll know what you’re charged for and what’s outstanding.
Contact your provider. Don’t assume that your insurer has things covered. Follow up by calling to discuss your medical expenses and confirm what’s covered by your plan.
Negotiate your bills. If your insurance doesn’t cover the bill, call your medical provider to learn about next steps. Your provider may be willing to negotiate a payment plan — or even a cash discount, if you can manage the payment up front — keeping it from collections.
An unanticipated medical bills should not add more stress to your recovery. You have 180 days to take care of healthcare debt before it shows up on your credit report.
Use the period to contact your insurance company, carefully review itemized bills and reach out to your provider for alternative payment.