Although your doctor’s office is not directly linked to the three major credit bureaus, namely, Equifax, Experia, and Transunion, you may be wondering if medical bills affect credit.
Do medical bills affect credit
On of the most asked questions for patients is whether or not your medical bills can affect future credit scores and therefore your ability to access loans, credit cards and other credit when you may need it. To answer this question, we need to review firstly how unpaid medical bills can have an affect on you as a patient and how generally the system of paying medical bills works.
Your payment information is not regularly reported to any credit bureaus. In fact, it is only reported when there is a case of an unpaid bill in which you have received final notice for.
If you are not proactive in paying your medical bills, are unable to cover the medical expenses that you are billed or are deliberately avoiding your doctor and hospital billing department, your doctor will turn your debt over to a collection agency.
This is where medical bills can have a direct impact on your credit as it will appear in your credit report. Having a bill in collections will affect your credit score. Collection agencies can take up to as long as seven years to drop off the unpaid medical bill; therefore, your credit report will remain affected for years.
Even if you pay a bill that is in collections, you may not be able to get it removed from the credit report. In future though, you may pay your bills on time and keep your credit card balances low to help your credit score bounce back.
Removing your medical bills from your credit report
More often then not, there are mistakes that are made when paying your medical bills. Even if you paid your medical bills on time, it may still be on record that you have not paid them. If you or insurer paid a bill, which went into collections, there are ways by which you can get it removed from your credit report. Below are the steps in order to remove your paid medical bills from your credit report.
Step 1. Document proof in support of your payment
You may collect payment records from your doctor, look up old credit card statements, or find copies of canceled checks and include them in your dispute letter. You should provide enough documentation that clearly shows that you paid your medical bills on time. This could be with an invoice with a specific billing due date followed by bank records of the transaction made to pay the medical bill. Be sure to include an receipts that confirms proof of payment in case you’ve paid in cash or made ATM withdrawals to cover the cost.
2. Send a letter to the bureau that reports your credit falsely
Send in a letter to the bureau, which reports your credit. You may have to check the credit reports of all the three bureaus to identify which one states your credit history incorrectly. In the letter, you need to mention that you are disputing the collections and include documentation in support of your paid bill.
3. Keep an eye on the Fair Credit Reporting Act
The Fair Credit Reporting Act needs you to keep in touch with the credit bureaus while the issue gets resolved. You need to keep a track on the status of your claim and offer additional documentation if the need arises.
Prevention to stop medical bills affecting your credit
One of the best ways to ensure that medical bills do not affect your credit is to prevent unpaid medical bills in the first place. Thinking of ways in which you can prevent medical bills affecting your medical bills in future, you may consider the following:
1. Payment planning helps
One of the key ways to reduce the risk of poor credit ratings due to unpaid medical bills is to plan ahead of time. This means creating an outline with your income, costs and deadlines for your medical bills to ensure that you pay by the deadline. If it helps, you can consider paying bills as early as you can so that the chances that you forget to pay them are reduced.
2. Understand your health insurance policy
Many times, health insurance policies can be tricky to understand. However the benefit of understanding your policy inside and out can mean huge reduction in stress. Know your policy in and out. Follow up with the insurer by phone or email if the payment has been made on a bill they have agreed to cover.
3. Online fundraising to cover unpaid medical bills
Online fundraising or crowdfunding for unpaid medical bills can be a great option in order to prevent unpaid medical bills. If you are unable to pay your medical bills, you can consider online fundraising to seek help from your family, friends, and colleagues.
Online fundraising seeks helps directly from your own network to cover the cost of treatment and medical care. By doing so, it can avoid you from having unpaid medical bills in the first place and therefore have no risk of low credit scores.
4. Talk to your doctor
Opening up the lines of communication can work for you in resolving unpaid medical bills. This is particularly helpful to prevent your doctor from working with the debt collections office. You may talk to your doctor and ask him/her and negotiate your medical bill. If you get lucky, it is a good idea to have a written note from your physician; you can use it in your favor when a dispute arises.
5. Seeking professional assistance
If you are overwhelmed by your bill, you can consider hiring a medical billing advocate. He/she will negotiate the bills for you. Although it may cost you a few hundred dollars, you may end up saving a lot more in the future.
Professional assistance can also ease the stress which can weigh heavily on you and your family. It can also provide better means of seeking further assistance with your medical bills but also ensure that your credit rating is not poor as a result.
1. Medical bills on your credit report: everything you need to know: http://www.nerdwallet.com/blog/health/2014/08/19/medical-bills-on-credit-report/
2. Credit bureaus and credit scoring: http://www.usa.gov/topics/money/credit/credit-reports/bureaus-scoring.shtml
3. Medical debts will soon weigh less on your credit score, but they’re still a problem: http://www.forbes.com/sites/christinalamontagne/2014/08/26/medical-debts-will-soon-weigh-less-on-your-credit-score-but-theyre-still-a-problem/