Did you know that one unpaid medical bill could damage your credit? Because they are the type of bill you can’t plan for, it can be detrimental to your finances. One medical emergency can cost thousands of dollars, putting you in a dire financial position. Medical collections have the power to lower your credit score as much as 100 points, so it’s important to know how to take care of them.
The following steps will help you keep and/or get these pesky accounts off your credit report.
Evaluate Their Validity
First, you need to make sure the collections are even legitimate. Oftentimes things get reported to the credit bureaus that are not true. Without you checking them though, you would never know this negative information was affecting you.
Go through your credit report with a fine-toothed comb. Question each medical collection reporting on it. Are they your charges? Did you pay them? Did your insurance company pay them? This is where any paperwork you have regarding the accounts will come in handy. You can show the credit bureaus the truth about the account, proving that it was paid in full.
If it was paid, follow through with the credit bureau to make sure they remove it from your account. You will have to follow through with plenty of paperwork and phone calls, but it’s worth it if the debt does not belong to you.
Ask for a Payment Plan
You can avoid the medical collection from hitting your credit report at all if you ask for a payment plan. After you determine the charges are valid, talk to the medical provider about cutting you a deal. Oftentimes they are willing to accept a payment plan as long as you promise and deliver regular payments.
When you ask for the payment plan, make sure you have a concrete plan in place. Know how much you can afford. Even if it’s just $25 per month, let the provider know that. Of course, the more you can pay each month, the better your chances of approval. Typically, they will want the debt paid off in a few years, but if the charges are extensive, you can ask for a little more time.
Negotiate the Costs
If you don’t have insurance or your insurance didn’t cover a charge, you’ll likely be charged the full amount of the medical service. Oftentimes this is several times more than what insurance would have paid. Medical providers know this, but will charge it to you anyway. It’s up to you to negotiate.
The more money you have to settle with the provider up front, the better off you’ll be. The medical provider knows the collection agency will only give them a small fraction of what they are owed anyway. If you promise a lump sum payment now and avoid the account from going to collections at all, you’ll have a better chance of getting an approval.
Paying for the Account to be Deleted
If your medical collection does get to the point of a collection agency, you have one more option. You can pay for the collection agency to delete the account from your credit report. In order to do this, you’ll need to negotiate with the collection agency. Don’t pay them any money until you have proof in writing that they will delete the account from your credit report.
You will likely have to agree to pay the amount in full in order for the collection agency to agree to do this. However, if you negotiate enough, you may be able to get them to settle to an amount less than the full amount, but enough that they feel the account is satisfied.
Dispute the Charge
The last tactic you can use to delete collections from your credit report is to dispute them. You will first have to find out which agency is reporting the collection. You must then write to them, asking for a dispute. You must include all information including the account number, name of debtor, and all of your personal information.
By law, the medical provider has 30 days to respond to the credit bureau regarding the dispute. If they don’t respond within that timeframe, the credit bureau has to delete the account from your credit report. Medical collections are often dealt with in this manner, so it is well worth the try.
Keeping medical collections off your credit report is possible as long as you do your due diligence. Talk to your medical provider the minute you receive a bill that you think is invalid or that you cannot afford. Preventing it from going to collections in the first place is the best thing you can do. If, however, it does get reported to the credit bureaus, you can work to get it off of there.