You probably don’t worry about medical bills ruining your credit. After all, medical providers don’t report to the credit bureaus.
While that’s true, there is a risk of your medical collections ending up on your credit report. If you leave your bills unpaid, the medical provider may send your bill to a collection agency. Many collection agencies then report the debt to the credit bureaus. Just one medical collection of decent size can greatly lower your credit score.
How do you avoid medical collections from hitting your credit report? Keep reading to learn the steps.
Start Negotiating With the Provider
Medical providers typically send your account to the collection agency once your bill is 90 days or more past due. If you know you are nearing that point and you can’t pay the bill in full, consider negotiating the cost with the provider.
This tactic works best when you have a lump sum you can send the provider to settle the bill. Not all providers will settle, but it’s worth a try. This is especially helpful if you don’t have insurance. Patients that have insurance pay contracted rates for medical services. This usually means lower rates than what the provider charges. If you are a self-pay patient, though, they typically charge you the full rate. It’s up to you to negotiate a lower rate with them.
When you negotiate with a medical provider, they will typically receive more money than they would from the collection agency. This makes them willing to negotiate. Just make sure that you are fair in your negotiations and that you get everything in writing. Don’t settle for a verbal agreement because there is nothing holding either party to the agreement.
Pay in Increments
If you don’t have a lump sum that you can use to settle the account with the medical provider, consider a payment arrangement. Some medical providers offer this upfront, knowing that most people can’t pay the full amount of their medical bills.
If your provider doesn’t offer it, suggest it to them. Before you bring up the topic, though, make sure you have an amount in your mind that you can pay each month. The higher the payment the better your chance of approval, but you never know. Even if you can only pay a small amount, let the provider know this. If you make your payments on time, the medical provider will receive a much larger portion of the bill than they would if they sent it to collections, so you have the upper hand here.
Do Your Research
If you can’t stop your account from hitting the credit report, it doesn’t mean that it has to stay there. Just because a provider reports your debt to the credit bureau as a collection doesn’t mean that it’s right. It’s important that you keep track of every medical bill that you receive as well as every payment that you make. Don’t forget about your insurance Explanation of Benefits as well. Each of these documents can help you prove your case should you find a collection that isn’t valid on your credit report.
You have access to a free copy of your credit report once a year from each of the credit bureaus. If you spread out when you obtain these reports, you can check your credit report three times a year. Use that time to evaluate any medical collections showing up on your report.
If you see a medical collection, look to see who the provider was and then look back at your documents. Did you already pay the bill and it was an oversight on the provider’s part? Was the insurance company responsible for the portion of the bill that the collection agency reported? Your documentation can help you prove your case.
Make sure that you follow through with the credit bureaus. Simply letting them know that you paid the bill or that it’s not your responsibility isn’t enough. You must send them copies of all of the reports. You should then follow up to make sure they resolved the issue and removed the account from your credit report.
Negotiate With the Collection Agency
Your final option if your collection hits the credit report is to negotiate with the collection agency. You’ll likely have a tougher time negotiating with them than the medical provider, so try to use this as a last resort.
What you want when you negotiate with the collection agency is a ‘pay for delete.’ In other words, the collection agency agrees to a certain amount of payment in exchange for deleting the account from your credit report. This eliminates the risk of future lenders seeing your collection, even though you paid it.
Just how much the collection agency will require in order to delete the account is on a case-by-case basis. Use your strong negotiating skills to pay the least amount for the collection, while still having the credit bureau remove it from your account.
Avoiding medical collections on your credit report is possible. You just have to be diligent about your medical debts. If you do get to the point that they hit your credit report, take the proper steps to get them removed as quickly as possible for the least amount of damage to your credit score.