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How medical debt affects your credit score

Most people know that debts such as credit cards and loans can affect their credit score. However, many North Carolina patients may not be aware that any unpaid medical bills can be reported to a collection agency and also end up on their credit report.

According to TIME Magazine, medical debt affects the credit reports of approximately 43 million people in this country. Medical debts are different from credit card debts for instance, because they often get referred to collection before the patient even receives the bill or the patient's insurance company submits a payment. In addition, medical bills often contain mistakes that average consumers are not aware that they should look for.

Therefore, staring last year, changes were implemented that modify just how medical debt is applied to a person's credit compared to other types of debt. Prior to adding a medical debt to someone's credit report, the three main credit bureaus will now wait 180 days. If there is a valid billing issue, this will give that issue time to be resolved. In addition, once a medical bill is paid off it is now removed from the person's credit report so that it cannot damage his or her credit in the future.

If consumers have medical debts that are legitimate, the North Carolina Consumers Council has some tips for avoiding having those bills referred to collection. For starters, patients would be wise to regularly review their credit reports and keep an eye out for any medical debts that should not be on there. If a medical bill does appear and a complaint is filed disputing it, a request should be made to have a statement to that effect included on the person's credit report. Finally, every effort should be made to pay medical bills in full. Many companies and providers are willing to work with patients to set up reasonable payment plans.

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