When a patient receives medical treatment at a hospital, they are often billed afterward, with the hope that their insurance will cover some or all of the costs. Uninsured patients can arrange payment plans, but unpaid or ignored medical bills can still affect a patient’s credit score. Sometimes, this results from errors made by the insurance company or healthcare provider, while in other cases, the patient simply cannot afford to pay.
However, there are steps you can take to remove medical bills from your credit report. If a mistake has been made, the credit bureaus will work with you to fix it. In some situations, patients can negotiate a reduced amount or even have their debt waived entirely. This article outlines practical steps to help you remove medical bills affecting your credit score.
1. Review Bills and Dispute Errors
Humans run hospital billing departments and insurance companies, so mistakes happen. A claim may have been sent to the wrong recipient, or an insurance company could deny a claim due to a typo. Early transfers to collections are also common. Impacted consumers should carefully review their bills to ensure no errors.
Key Considerations:
- 180-Day Grace Period: Unpaid medical expenses only impact your credit score after 180 days. Medical bills less than six months old shouldn’t affect your credit.
- Disputing Inaccurate Bills: The three major credit bureaus (Equifax, TransUnion, and Experian) will remove any erroneous medical bills affecting your credit report if you file a dispute.
- Insurance Coverage: Double-check your insurance policy. If your insurance should have covered the procedure, provide the necessary evidence.
- Mistaken Payments: Ensure the bill hasn’t already been paid and that an administrative error didn’t lead to it being sent to collections.
2. Filing a Dispute
Once an error is discovered, file a dispute with one of the three credit bureaus. Include evidence such as receipts or proof of insurance to support your case. Attach a cover letter explaining the issue. If the credit bureau determines that the bill shouldn’t impact your credit, they will remove it. The other two credit bureaus will also be notified to ensure consistency.
3. Paying the Bill
Even if your debt has been sent to collections, many debt collectors will accept a reasonable payment plan based on what you can afford. Alternatively, they might agree to reduce the amount owed. However, keep in mind that:
- Debt Impact: Unpaid medical debt continues to affect your credit score until fully paid off.
- Installments Build Credibility: Timely payments demonstrate your reliability to landlords, lenders, and financial institutions.
- Statute of Limitations: Debts are removed after a certain number of years, which varies by state. If your debt is close to expiration, consider if it’s worth paying immediately.
4. Financial Assistance
- Hospital Policies: Many hospitals, particularly nonprofits, may waive unpaid medical bills or offer reduced rates. Contact their billing department directly to inquire.
- Nonprofit Support: National nonprofits, local charities, and churches often have assistance programs for uninsured or low-income patients.
5. Lenders, Credit Providers, and Medical Debt
- Selective Impact: Some lenders may overlook medical debt for small loans or credit lines, though larger loans like mortgages or car leases often require debt clearance.
- Error Resolution: File disputes to ensure any erroneous medical bills are removed.
- Payment Plans: Consistent payment builds credibility, while negotiated settlements can significantly reduce your debt load.
Conclusion: Medical Debt Management
Addressing medical debt is a strategic process involving disputes, payment plans, and negotiation. Each step should align with your overall financial goals, timeline, and specific credit needs. By ensuring errors are corrected and managing debt responsibly, you can position yourself for a healthier financial future while accessing the credit you need.
