Top 5 Ways To Deal With Medical Bills on Your Credit Report

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medical bills on credit report


If you’re one of the millions of Americans out there that incurred costly medical bills and didn’t pay, you might have ended up with a medical collection account on your credit report. Having medical bills on your credit report as collections can significantly damage your credit!

The good news is, all hope is not lost. There are steps you can take to mitigate these medical bills affecting your credit report. The bad news is, it’s not easy and needs diligence and the willingness to work on it!

Let’s look at the Best Ways To Remove Medical Bills From Your Credit Report.

1. Check your credit report for mistakes

This happens more often than you’d think! When you think about credit and your credit report, you imagine people and computers that could never make a mistake when submitting information to the credit bureau. That couldn’t be further from the truth.

People make mistakes, and there is a chance that the collection on your report might have been a mistake. Remember that medical bills appear on your credit report only after they have been 180 days late. So make sure you have a record of your medical bills and check if the collection is accurate, and matches with the information you have.

The best way to rectify an issue on your credit report is to file a dispute directly with the credit reporting agency. One way is to go on the respective sites of the agency, or you can use a service like Credit Karma. It’s a service that allows you to check your current credit score, credit report, and also helps file disputes with the credit agency. Check them out.

2. Check if your insurance paid up

The second thing to look at is if your insurance paid up their portion of the medical bill. The insurance that you use may have been over 180 days late and the late payment may now be on your credit score.

Although this isn’t common, it does happen that delays ranging from processing errors, issues on their end, etc, can delay the time that your insurance pays up.

Once your insurance has paid the collections on your report, the issue is dropped and removed from your credit report. So make sure that you check with your insurance and see if they have paid their portion. However, if insurance had already paid, then the collection might be the balance that you still owe.

3. Pay off the balance

Now, I know that this might be a no-brainer, but it’s something to definitely discuss and make sure that you understand that it’s a possibility. As big as the balance on your medical collections bill might seem, with dilligence and perseverance, it’s definitely possible to pay it off. Ignoring it won’t make it go away.

Instead of running from the bill/balance, here are two examples of ways to help you pay off the balance and have the collection affect your credit a bit less:

  • Budget: By setting a budget, you can accurately figure out how much you earn, how much you spend, and how much you can allocate to paying off the balance. Here’s a Beginners Guide to Budgeting
  • Increase your income: If you increase your income, you have more income to attack the debt that you have. You can do this by earning more at your job, or earning passive income
  • Crowdfund: You can set up a fundraiser to get donors from all over the world to help you pay off your medical debt.

Remember, paying off the collections doesn’t instantaneously remove that record from your credit report. It remains there over time, but lessens it’s effect over time. A paid collection is always better than an unpaid collection.

4. Ask for a goodwill deletion

If your credit report is otherwise spotless, and you just had a slip up because of extreme circumstances, then this might help you wipe that issue from your credit report.

The reason this option is rarely talked about is that it very very rarely works. It’s not a get out of jail free card. Instead, you must be able to prove to your collection agency that you really were experiencing unforeseen circumstances, like a coma! 🙂

Jokes aside, if your credit is crystal clean, never missed anything, never late, and you’re able to pay off the balance as soon as you find out about it, then you could consider writting a goodwill letter to the collections agency to ask that the collections be removed from your credit.

Again, this rarely works, but it has worked for some and there is no harm in trying. The collections agency might work with you, but if the credit bureau refuses to take off the negative mark on your score, then there’s nothing more you can do, unfortunately.

5. Wait for it to fall off your credit

When and if all else fails, the last resort is to let the collections on your credit score fall off over time. The biggest problem with that is that the delinquent medical bill will remain on your credit report for seven years. During that time, you’ll look less attractive to lenders, so it’s harder to get credit products like a credit card or mortgage.

If you’re in this category, and there is no way to pay back the delinquent medical bills on your credit report, the best thing you can do is to improve the rest of your credit report. Things like maintaining low credit card balances, not opening new accounts, low credit utilization, can all contribute to making your credit report lot better than just letting it all go downhill.

So chin up, and make sure you keep the rest of your credit report sparkling clean!

Final Thoughts

It’s always easier to deal with medical bills before they go into collections. Once they are in collections, it’s much harder and sometimes impossible to remove them from your credit report, until they fade away over time. The number one cause for bankruptcies in America is medical bills! So you always want to handle them as soon as possible before they are a problem.

So make sure do this instead early on when faced with medical bills:

  • Communicate with your health insurance: Make sure you understand exactly what you’re paying, and what they are paying beforehand
  • Set up a payment plan: If you can’t pay the entire balance outright, make sure you set up a payment plan and pay off the balance over time
  • Always pay attention to your credit score: Make sure you always check your credit score often so you know exactly what’s going on with your credit at all times

Stay safe out there, and always be diligent! 🙂

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