Do Outstanding Medical Bills Affect Your Credit Score?

By  //  December 1, 2021

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Even with health insurance, many people end up with medical debt. It’s like an inescapable thing that happens in life. In fact, according to a recent finance survey by HealthCareInsider, 60% of respondents, or six in ten Americans, are somewhat distressed that a major health issue could lead to medical debt. 

Amassing medical debt can have grave consequences on your credit scores as well. Once they’re on your credit report, it can take several years to clear them out. The best way to protect your score is to pay your bills on time. 

However, if you can’t afford to pay for the medical bill, consider double-checking with your insurance company if they’ll cover it. 

When Do Medical Offices Send Your Debt to A Collections Agency?

Do hospital bills affect your credit? The answer is YES. 

Generally, medical bills appear on your credit report if they are sent to a collections agency. So, assuming that you pay your hospital or doctor’s bill on time, it won’t be reported to the credit bureaus. 

However, if you’re late or miss the due date, the medical office may send your outstanding medical bill to a collections agency. According to Experian, even though each hospital has its unique practices, it’s common for providers to wait at least ninety days before turning the debt over to collections. 

Some healthcare providers may even wait 180 days. Even so, the three major credit bureaus typically give you a 6-month grace period. Meaning, outstanding medical bills won’t show up on your report until after the grace period. 

So, in a sense, even if your unpaid bills are sent to collections, with the grace period, you can still pay them before they appear on your credit report. 

How to Get Medical Debt Off Your Credit Report

Medical debt can remain on your report for at least seven years, six months after they are first due. It’s crucial to understand that when a medical debt shows up on your report, you can’t get it off simply by repaying the debt collector. 

However, there are several things you can do to get an unpaid bill off your credit report.

■ Dispute. You can challenge it if you think it was put on your report because of fraud or by mistake.

■ Ask Your Insurance Company to Settle It. Even if you pay off the debt collector, the bill could remain on your credit report for seven years. However, if your health insurance company pays the collection agency, the credit bureaus might clear it out from your report. With that said, if you think your insurance provider should have repaid the bill, you can ask them to review your claims.

Medical collections will remove your debt from your report after seven years. Even so, your credit report isn’t your only concern. In addition to reporting your outstanding hospital bill to the credit bureaus, the medical collections can take you to court to retrieve the money you owe. 

Usually, they have 3-6 years before the statute of limitations expires. Your last resort is to file for bankruptcy protection if you can’t manage to pay off your medical expenses. 

How to Keep Medical Bills Off Your Credit Report

The following tips can help you keep medical collections from showing up on your report.

■ Keep Track of Your Due Dates. Automate payments or set a calendar reminder so that you won’t lose track of your due dates.

■ Review Your Credit Report for Dubious Behaviors. You can dispute any bill and get them removed if you see a bill for a hospital visit or doctor’s appointment you never made.

■ Negotiate. When you don’t have healthcare insurance, consider negotiating the payment agreement or cost before undergoing any treatment. Hospitals might charge lower and affordable rates for patients who pay privately. 

■ Ask for A Payment Plan. If you can’t manage to pay your bills in their entirety, request a payment plan from your medical provider to give you an extended period to pay. 

Know What Your Insurance Provider Will Cover. So that there won’t be any medical bill surprises, call your health insurance provider and ask what procedure they will cover and how much they will pay.

Final Thoughts

As long as you pay your medical bills, they won’t hurt your credit. While unpaid bills take a long time to appear on your credit report, the detriment to your credit score can be outstretched if they do. Quick action is key to avoiding a hospital debt from hurting your credit score. 

With that said, as soon as you have your bill, double-check it to ensure it’s accurate. Call your healthcare provider and insurance company to resolve any issues, and look into it vigilantly until you know the medical bill is paid.