Outstanding bills and unpaid debts can have a big effect on your credit score. But does the same apply when those bills are medical? A serious injury or illness is difficult enough to deal with, but adding financial worries on top only adds to the stress.
Can medical bills harm your credit score?
If you manage to pay your medical bills on time, they won’t affect your credit score. However, if you fall behind on payments and your debt is sold to a collection agency, this can affect your credit.
Most medical providers won’t sell your debt to a collection agency unless it’s 60, 90, or 120 days overdue. Even once that happens, it usually won’t have an immediate effect on your credit. The three main credit bureaus, Equifax, TransUnion, and Experian all give you a 180-day waiting period to give you time to resolve medical debt before it appears on your credit history.
How to avoid medical bills affecting your credit
If you can’t pay your medical bills on time, there are a few actions you can take to limit the damage to your credit score.
Attempt to negotiate medical bills
In many cases, medical providers will work with you to recover the owed money or at least part of it. Some providers offer discounts if you agree to pay a lower amount in full or a significant down payment with ongoing payments.
Check if you can get assistance
You may be able to get some financial assistance with your medical bills, but this will depend on your income. You may be able to get assistance from religious groups or nonprofit organizations.
Work out a repayment plan
You may be able to work with your medical provider to outline a payment plan. Health care providers often break bills down into manageable monthly payments. However, interest and other fees may apply which will increase the amount you owe over time.
Use other credit
Some people use other credit as a last resort to clear medical debts. The best way to do this is to use a credit card with a 0% interest period which can help you clear the debt before it goes to a collection agency.
Just be aware that once that 0% interest period is up, you may have highly monthly payments to factor into your budget due to the high-interest rates credit cards usually charge.
Hire a medical billing advocate
This isn’t always necessary but dealing with medical bills can be overwhelming, especially if you’re recovering from an illness or injury. A medical billing advocate can sort through your bills and negotiate them on your behalf.
What if medical bills are on your credit report in error?
Sometimes even if you’ve paid your medical bills it can appear on your credit report. If this happens, it’s not an error that typically solves itself automatically. You will need to address it quickly.
The good news is that you can dispute the error with the credit bureaus if the bill is less than 180 days old or it has been paid off by your insurance.
While there’s no guarantee you can get it removed, it’s definitely worth trying.
To raise a dispute, you will need to:
No one wants to worry about medical debt and credit scores when they’re recovering from illness or injury but it’s definitely important to stay on top of it. If you feel unable to handle it all, getting help from a medical billing advocate or even friends or family can help you get through it.
Even once your debts are paid off, be sure to check your credit report a few months later to check there has been no damage to it. The longer you leave it, the more difficult it can be to rectify so it pays to be prepared.
It doesn’t really matter if it’s medical bills or other expenses currently haunting you. If you find yourself in need of a short-term emergency loan, apply today with Jora Credit and we will do everything we can to help you out of your current financial predicament.
If you want to learn more about credit score read this.