Do Medical Bills Affect Your Credit Report?
Ever asked yourself, "Do medical bills affect your credit report?" The short answer is yes, they can. However, recent changes have made it less likely for medical bills to severely impact your credit scores.
In this article, we will explore the relationship between medical bills and credit reports, provide tips to prevent medical bills from affecting your credit, and discuss how to manage and even eliminate medical debt.
Medical bills can have a significant effect on your credit report if they're left unpaid and sent to collections. Fortunately, medical debt is treated differently from other types of consumer debt. Starting from July 2022, paid medical debt was erased from credit reports. This means if you've cleared your medical debt, it should no longer appear on your credit report. It's crucial to regularly check your reports to ensure that this is the case.
Regarding unpaid medical debt, as of July 2022, there's a one-year delay before such debt appears on your credit reports, up from six months previously. Moreover, as of April 2023, all three credit bureaus announced the removal of unpaid medical debt with an initial balance of less than $500 from credit reports.
How to Stop Medical Bills from Affecting Your Credit
There are several ways to prevent medical bills from negatively impacting your credit report.
1.Follow up with the insurance company:
Always ensure your insurance provider has covered what it should under your policy terms.
2.Negotiate unmanageable bills:
If your bills are too high, negotiate them down. Many healthcare providers are willing to set up payment plans or even reduce the amount owed.
3.Get your unpaid debt under $500:
If possible, try to keep your unpaid medical debt under $500. As mentioned earlier, as of April 2023, unpaid medical debt with an initial balance of less than $500 will no longer appear on your credit reports.
4.Hire a billing advocate:
If you disagree with the amount being charged or but not otherwise experience financial hardship, a medical billing advocate can be of immense help. They can help you understand, negotiate, and reduce your medical bills.
How Long Do Medical Bills Stay on Your Credit Reports?
In most cases, medical debt can stay on your credit report for up to seven years from the time it's reported. However, each credit bureau may handle medical debt differently, so it's essential to monitor your credit report regularly.
How Can DebtStoppers Help You with Preventing Medical Bills on Credit Reports?
Unmanageable medical debt is one of the leading reasons people file for bankruptcy. Despite this, many individuals falsely believe that there are special protections for medical debts in bankruptcy. This is a myth. Medical debt, like any other ordinary debt, is 100% dischargeable in bankruptcy.
If your medical debt is more than you can reasonably pay, or if it's part of a larger amount of debt that feels overwhelming, consult with an attorney at DebtStoppers today. The call is free, and we will explain your rights under the bankruptcy code. Knowledge truly is power!
To wrap up, while medical bills can impact your credit report, several strategies can mitigate this impact. It's important to be proactive in managing your medical bills, understanding your credit report, and seeking professional help when necessary. By doing so, you can minimize the effect of medical bills on your credit report and preserve your financial health.
Remember, unpaid medical bills take longer to hit your credit report, and those with starting balances of less than $500 no longer appear. The weight of medical debt on some credit scores has also been reduced. Medical debt is a challenge to many Americans, but with the right approach, it doesn't have to be a financial disaster.