Most lenders looking at your
credit report are looking at how much debt your carry. A
typical lender does not care what type of debt you have, but places
more value on how much debt you have. Medical debt may still
be different from other types of debt, because it is more often
than not out of your control. Medical debt will affect your
credit score if it goes unpaid even though it is usually not
planned for.
As a general rule, your timely paid
medical bills do not get reported on your credit
file. However if you fail to pay, the debts are often
sold to a third party collection agency who is quick to report your
negative debt and come after your for payment plus interest
damaging your credit score for as long as seven years from the date
you first fell behind.
In the event you fail to pay your medical bills and you have a
collection agency coming after you, your first course of action
should be to make sure the amount of debt being collected is
accurate. More often than not, when medical debts are sold to
collection agencies for pennies on the dollar. The agencies
do not do their due diligence and research the accuracy of the debt
prior to contacting you for collection. Reach out to the
collector and make a
formal request for validation of the debt. The collector
must cease all collection efforts and provide you with proof that
the debt is valid prior to continuing to collect payment.
Should the collector provide you with information proving the
debt is accurate, prior to making payment, contact your insurance
provider to make sure your coverage is adequately reflected on the
bill or that the bill was submitted to your insurance carrier in
the first place. Errors do happen in medical billing, so
ensuring the bill was correctly submitted may result in you not
having to hand over a check.
After contacting your insurance company if you discover you are
still responsible for the full payment and you have every intention
of paying, contact the hospital or doctor’s office and see if you
can pay them directly. Paying the original creditor directly
may prove to be much less of a hassle and may save you some money,
but there is no guarantee they will accept your payment. If
you have a history of making timely payments in the past, there is
a chance they will take your lump sum payment or even work out a
payment plan. Bottom line is, you must stay on top of all of
your medical bills, even bills sent to your insurance
company. Make sure the medical provider always has your
correct address and request it send you copies of all bills, even
those submitted to your insurance company for payment. It is
your credit report that will suffer the consequences, even if it is
not your mistake.
For more information on medical debt and your
credit report, contact SmithMarco P.C. for a free case
review.