Sometimes a medical emergency can leave you with a lot of bills. What happens when you can’t pay them all?
Many people are often financially unprepared for a medical emergency. Even when health insurance covers much of the cost, there can sometimes be delays or other issues resulting in you being responsible for a portion of the debt. This can put a huge financial burden on you, and if you are late in making payments on your medical debt, the hospital or doctor’s office may send your debt to a collections agency. This can have a huge impact on your credit score, affecting you adversely for many years to come.
Medical emergencies affect a credit score more often than you might think, especially with the current confusion regarding health insurance. Many individuals don’t have health insurance due to excessively high rates, while others have health insurance that only pays a portion of medical bills. With the remainder of the bills up to you to pay, depending upon how much you owe, you may soon find yourself unable to keep current with payments.
Once a medical collection is filed, it will appear on your credit history, and will remain there for a number of years even if you pay it shortly afterwards. Unfortunately, once it is in your report, you may wind up with a bad credit score, which can affect you when you apply for credit, a loan, or a mortgage, and may also raise your interest rates.
Keeping a Good Credit Score With Medical Debt
Checking your credit history is important in order to know if you have a bad credit score or a good credit score.If your current score is good, obviously you want to keep it that way, and if it is bad, you’ll obviously want to do what you can to improve it. A great credit history with no negative marks can be severely impacted even by a single action noted from a collection agency or debt related to medical bills.
A medical emergency can have bills coming from many different offices and doctors, and it is all too easy to miss one, or simply be unable to pay one in time. Likewise, navigating medical insurance claims processes can also be time-consuming and confusing. That’s why medical emergencies affecting a credit score is such a common occurrence facing many in the US today. Subsequently, it is important to remain vigilant and attentive to all the bills, insurance statements and notices that come your way, so as to avoid a medical collection.
Keep in contact with hospitals, doctors, and anyone who handles the billing, because sometimes a medical account can be given over to a collections agency without notice, simply because someone in a billing department was following standard procedure. Some offices are willing to work with you and will hold off sending your medical debt to collections so long as you make regular payments, even if they are small.
More Americans Each Year Find Medical Emergencies Affect Credit Score
A study performed by the Commonwealth Fund in 2010 found 30 million cases of individuals checking their credit score to find medical collections on them, and that number has been steadily increasing in recent years due to the troubled economy and rising medical costs.
When checking your free credit report, if you do find medical collections on them, and they have since been paid, it may be possible to have the items removed from your report. To do so, you typically must file a claim with the consumer bureaus Experian, Equifax and TransUnion. The process can take a considerable amount of time, and may not have the desired results, but if it is successful, it may help to improve your bad credit score.