Did you know that your good credit score could drop by as much as 100 points, all because of medical collections that show up on your report? 
 
Whether an unpaid medical bill ends up on your credit report depends on if your doctor’s office or hospital reports a late payment or unpaid bill to the three major credit bureaus or turns it over to a collection agency.
 
The largest part of a credit score is payment history. It accounts for 35% of a credit score and shows if you’ve paid past credit accounts on time or missed payments. Not paying an account at all, such as a medical debt, counts as a negative mark on your credit history.
 
While the newest version of the FICO credit score, the FICO 9, and the VantageScore 3.0 weigh medical bills in collections less than other unpaid accounts, many lenders are not using these newer scoring models.  Therefore, a drop in your credit score can cause credit card companies and other lenders to deny your applications or can cause lenders to charge you higher interest rates.
 
Here are tips to protect your credit from medical debt:
 
1)  Call your insurance company and health care provider after receiving care to verify if you own a balance.  Don’t assume that everything will be handled by your insurance company.
 
2)  Request an itemized bill from your health care provider in order to verify the charges and possibly negotiate the payment terms.
 
3)  If a collection agency contacts you regarding a medical bill, ask if they will refrain from reporting the bill if you pay right away (assuming the debt is legitamet). If you don’t believe that you legitimately owe, then the Fair Debt Collection Practices Act gives you the right to dispute the debt with the collection agency and with the credit reporting agencies that the debt was reported to. 
 
If you have collections accounts I can save you up to 50% on the amount that was owed and stop all the harassing phone calls.  Call or email me today.

 

-Erik Kaplan

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