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Can medical debt affect your credit score?

Your past medical history is never included in your credit report, but unpaid medical bills can indeed affect your credit score. Clinical agencies such as hospitals or a medical supply store will often report your debt to credit agencies, and this can have a negative impact on your credit score.

How much will medical debt hurt your credit score?

This debt can prevent you from doing many important things such as getting approved for a loan, a mortgage, and many other important financial services. However, medical bills won’t always have a negative effect on your credit score – only unpaid medical bills will cause a negative effect.

Unpaid medical bills can potentially drop your credit score 50 to 100 points in a matter of months. Usually, hospitals and doctors will not report your debt to credit agencies. Instead, they will sell your debt to a collection company that will report your debt to credit agencies (often with the name of the doctor or medical service provider never being revealed). Very few people have the savings needed to cover this debt, and this usually leaves them with huge amounts of debt they struggle to pay back and rapidly declining credit scores.

What can you do to keep medical bills from affecting your credit score?

Sometimes medical bills can go unpaid from not even realizing you have any unpaid medical bills. You should always check up with your insurance companies and medical service providers after each medical visit to make sure you don’t have any outstanding balances. Never assume that your medical bills have been paid off because you have a good or reputable insurance company, or because you don’t remember being notified of any outstanding balances.

What should you do if you already have medical bills?

You should also check to make sure there are no copays, deductibles or out-of-pocket expenses in your insurance plan you may have forgotten about.

if you contact your medical service provider and find medical bills you will have to personally pay for, you should immediately negotiate a payment plan. Knowing about medical bills ahead of time will help keep unpaid medical bills from negatively affecting your credit score in the future.

After agreeing to a monthly payment plan, make sure you get the details of the agreement in writing so you will have a paper trail in the future for disputing unpaid collections. And make sure you continue monitoring your medical bills for medical visits in the future to prevent them from having a negative impact on your credit score as well.