Do Medical Bills Affect Credit Score?

If you were sick and had to go to a hospital, you probably received a heft medical bill. Healthcare in the United States is extremely expensive, especially if you don’t have healthcare insurance. That said, can medical bills affect your credit score? We will answer this question in much detail below.

Do Medical Bills Affect Credit Score?

Although merely receiving a medical bill will not affect your credit score, if you fail to pay your medical bill, your failure to pay it may affect your credit score. Failure to pay your medical bill can affect your credit score because medical providers often sell unpaid medical bill debt to collection agencies. Collection agencies will then add a collection account to your credit report, which can and probably will cause significant damage to your credit score.

Each medical provider is different. Some medical providers will sell your unpaid medical bill debt to a collection agency after it becomes 60 days, 90 days, or 120 days past due. After your medical provider sells your medical bill debt, the collection agency will then attempt to collect the unpaid debt from you. In most cases, the collection agency will place a collection account on your credit report.

Collection accounts are derogatory items that can significantly lower your credit score, especially if you had an excellent credit score to start off with. The higher your credit score, the bigger the point drop will be.

Once a collection account has been added to your credit report, it will remain on there for 7 years from the date that you became delinquent on paying your medical debt. For example, if you failed to pay your bill on January 1st, 2020, the collection account will remain on your credit report until January 1st, 2027.

After the 7 year period, the collection account will automatically be removed from your credit report, no longer lowering your credit score. When a collection account is added to your credit report, it will cause the biggest drop in your credit score when it’s first added. That said, as the collection account ages, its impact on your credit score will begin to lessen until it’s eventually removed from your credit report.

180 Day Waiting Period

The credit reporting bureaus (Equifax, Transunion, and Experian) have put into place a 180 day waiting period before medical bills and medical debt can be placed on your credit report. This gives consumers 180 days during which to settle their medical debt before it’s added to their credit report, causing significant damage to their credit score.

So, if you have a medical bill that you need to pay, negotiate with your medical provider, or send to your insurance provider, you now have 180 days (6 months) to make the payment before negative items will be placed on your credit report.

You should take medical bill collection accounts seriously as they can cause serious damage to your credit score. The higher your credit score, the more damage a collection account can cause. So, make sure to take car of your medical bills to prevent them from being sent to collections and causing damage to your credit.

How Long Can a Medical Bill Affect Your Credit Score For?

As previously mentioned, if your medical bills are sent to a collection agency, the collection agency will place a collection account on your credit report. Any collections account, including a medical bill collections accounts, will remain on your credit report from the date that you first became late or delinquent on making your payment. After the 7 year period ends, the collection account will automatically be removed from your credit report.

If for any reason, a collection account remains on your credit report for more than 7 years from the date of delinquency, you can have it removed by either contacting the collection agency reporting the collection account or by filing a dispute with the credit reporting bureau showing the delinquent account. If you file a dispute with the credit reporting agency, they will conduct an investigation to determine whether the collection account should be removed, and they will either then conclude that it should be removed or should remain on your credit report. If the collection account has been on your credit report for more than 7 years, they will likely remove it from your credit report.

How to Get a Medical Collections Account Off Of Your Credit Report?

If the medical bill debt that you owe is valid, it is very difficult to have a medical collection account removed from your credit report unless there is inaccurate or incorrect information being reported. If there is anything inaccurate being reported, you can have the collection account by filing a dispute with the credit reporting agencies displaying the incorrect information. Also, you have the option of contacting the collection agency directly and asking them to remove the inaccurate information from your credit report.

We often get asked whether paying a medical bill collection account will remove it from your credit report, and the truth is that paying a collection account will not remove it from your credit report. That said, paying a collection account will prevent the collection agency from continually calling you and contacting you to pay the outstanding debt, and from the collection account being sold to a different collection agency.

Also, when it comes to your credit score, paying a collection account will not improve your credit score. A paid and unpaid collection account have the same impact on your credit score. Also, paying a collection account does not remove it from your credit report. However, paying a collection account prevents it from being sold to another collection agency, which will then attempt to collect the debt from you.

So, if you want to prevent further damage to your credit, you should contact the collection agency that owns the debt and negotiate to pay a lower payment or negotiate a payment plan.

How to Know If Unpaid Medical Bills Are On Your Credit Report?

If you have unpaid medical bills and are wondering whether the debt has been sold to a collection agency, you should check your credit report. Most collection agencies will report the collection account to either one or more of the credit reporting bureaus. So, pull a copy of your credit report and examine it to see whether a collection account has been added. Most credit reports have a section that displays any collection accounts that are on your credit report. There are a ton of free options that allow you to check your credit report for free. For example, Credit Karma allows you to check your Transunion and Equifax Credit Reports for free. You can also check your Experian credit report for free by visiting their website and signing up for a free account.

How to Keep Medical Bills From Negatively Affecting Your Credit Score?

Don’t Ignore Medical Bills

The best thing that you can do to prevent medical bills from negatively impacting your credit score is to pay attention to and address any bills that you receive from medical providers. People often ignore medical bills believing that the medical provider will just continue to send out statements. They do not know that most medical providers will sell the unpaid medical bill debt to a collections agency.

Once a medical bill is sold to collection agency, the collection agency will report a collection account to the credit reporting bureau, causing significant damage to your credit score. So, contact your medical provider and ask for a payment plan or a reduction in the amount of money that you owe. You will be surprised by how many medical providers will be willing to work with you to recoup the amount of money that you owe them.

Review Your Medical Charges

Whenever you get a medical bill, you should review the medical billing statement to determine that the procedures and items you were charged for are accurate. If you believe that you were charged for something that does not belong to you, you should simply ignore the statement. Instead, you should contact your medical provider and bring any incorrect or inaccurate items to their attention.

Negotiate Your Medical Charges

If you did not negotiate your medical charges before medical treatment, you should contact your medical provider and ask them to reduce the charges for medical services. Many medical providers are willing to work with patients who are paying out of pocket. Some medical providers will even offer to place you on a payment plan to reduce the financial burden on you. Negotiating your medical charges and agreeing to settle your bill is the best way to prevent your medical debt from being sent to collections and damage to your credit.

Periodically Check Your Credit Report

Whether you have unpaid medical bill or not, you should make it a habit to periodically check your credit report. When you check your credit report, look to see if there is any negative information being reported to the credit reporting bureaus. If you find a collection account or any negative information, contact the creditor to verify the validity of the information being reported. Oftentimes, medical bills get delivered to the wrong address. If this happens, you could find a collection account on your credit report. So, it’s best to periodically check your credit and address any negative items that you may find on it.

Credit Score Planet Frequently Asked Questions

1. How can I get medical bills off my credit report?

Once a collection account is added to your credit report because of an unpaid medical bill, it is very difficult to have the collection account removed from your credit absent inaccurate or incorrect information in the collection account reported. You can try disputing the collection account, but if it’s valid, it will likely remain on your credit report for 7 years. Another option that you have is to contact the collection agency and negotiate with them. Ask them for the option to pay the bill and have the collection account removed from your credit report. Some collection agencies will agree while others will refuse to do so.

2. Do medical bills go off your credit report after 7 years?

Yes, unpaid medical bills that are sent to collections will remain on your credit report for 7 years from the date you first failed to pay the medical bill. After the 7 year period, the collection account will automatically be removed from your credit report.

3. How do medical bills hurt your credit?

Medical bills alone do not hurt your credit score. In fact not paying them does not hurt your credit score. However, if medical bills are left unpaid for a long time, your medical provider or hospital may sell the unpaid medical bill debt to a collection agency. The collection agency can then damage your credit score by adding a collection account to your credit report.

4. Can you negotiate medical or hospital bills in collections?

Yes, you can always negotiate with the collection agency handling your unpaid hospital or medical debt. In fact, collection agencies often purchase medical debt for a fraction of the amount owed, making negotiating an option for you.