Medical bills can have a significant impact on your credit, especially when left unpaid. If not managed properly, they can result in negative credit reports that harm your financial health. Understanding how medical bills affect your credit, how long they stay on your report, and the steps to manage or remove them is essential for maintaining a good credit score.
Do Medical Bills Affect Your Credit?
Medical bills do affect your credit, but not immediately. When you receive medical care and don’t pay the bill, it typically won’t be reported to the credit bureaus right away. Healthcare providers usually pass unpaid bills to a collection agency, and this is where the trouble begins.
- When Medical Bills Are Reported: Once the collection agency takes over, the unpaid medical debt can be reported to the credit bureaus, lowering your credit score.
- Impact on Your Credit Score: Medical debt in collections can decrease your credit score by a significant amount, potentially by 100 points or more, depending on your current credit standing.
How Long Does Medical Debt Stay on Your Credit Report?
Medical debt can remain on your credit report for several years, but recent changes in regulations have helped lessen the impact of this kind of debt.
- Timeframes for Medical Debt: Typically, medical collections can stay on your credit report for up to seven years. However, unpaid medical bills don’t get reported right away; there’s often a 180-day grace period before they appear on your report.
- Can Old Medical Bills Be Removed?: Yes, you can work with the collection agency or credit bureau to remove old medical debt. Paying off the debt doesn’t automatically remove it from your report, but it may be possible to negotiate removal upon payment.
Can Hospital Bills Go on Your Credit Report?
Yes, hospital bills can appear on your credit report if they remain unpaid for too long. This happens after the healthcare provider transfers the debt to a collections agency.
- How Hospital Bills Get Reported: Hospitals will generally not report unpaid bills themselves, but the debt will show up on your credit report if it’s sent to collections. The best way to avoid this is by working out a payment plan with the hospital before the debt goes to collections.
- Strategies to Avoid Credit Impact: Contact your hospital early if you’re unable to pay your bill in full. Many healthcare providers offer payment plans or financial assistance programs that can help prevent your bill from being sent to collections.
How to Remove Medical Bills from Your Credit Report
If medical bills have already made their way to your credit report, there are strategies to get them removed. While paying off the bill won’t automatically erase the debt from your report, you can take additional steps.
- Disputing Medical Collections: If there are inaccuracies or errors with how the bill was reported, you can dispute it with the credit bureaus. This may result in the debt being removed from your report.
- Negotiate Removal After Payment: When settling your debt, ask the collection agency for a “pay-for-delete” agreement, where they remove the debt from your report after payment.
Common Mistakes to Avoid with Medical Bills on Credit
Handling medical bills improperly can lead to avoidable damage to your credit score. Here are some common mistakes and how to avoid them:
- Ignoring Medical Bills: Ignoring your bills won’t make them go away. Be proactive in contacting your healthcare provider and arranging payment options if needed.
- Not Reviewing Credit Reports Regularly: Regularly check your credit reports to ensure there are no medical collections or errors that need correcting. You’re entitled to a free report every year from each of the three credit bureaus.
