Medical Bills and Your Credit Score
Debt Collection Lawyer Tampa, FL
According to data from the federal government, one out of every six persons has some kind of medical debt that is showing up on their credit report. And almost half of those unpaid medical bills are affecting consumers’ credit scores. Delinquent medical bills can lower your credit score by up to 100 points. Studies show that almost 30 million people are contacted by collection agencies for overdue medical bills every year.
And it is not only people who don’t have medical insurance that end up owing big money to doctors and hospitals. All it takes is one serious illness or accident and even people who have good health insurance can see the co-pay amounts adding up to a mountain of medical debt.
So how does a person make sure that high medical bills do not ruin their credit? Consumer advisors recommend several steps people can take to protect their credit.
One procedure can mean multiple charges – from the physician, the hospital, lab work and other testing. Make sure to keep track of all the bills you have coming in.
When you do receive a bill from a medical provider, read it over carefully to make sure that what you are being billed for is something that your medical insurance covers. If it is, then make sure that your insurance provider is being billed directly.
If a bill hasn’t been paid within 30 days or so, contact the insurance company and the medical provider to find out what the delay is. Some medical providers will send a bill to collections if it isn’t paid within three to four months.
If the insurance company has denied a charge and you have filed an appeal, let the medical provider know this information so they won’t send the bill to collections.
You should also contact the medical provider for any bills that you are responsible for but cannot pay. Many providers will work out payment arrangements with you and also help to see if you qualify for any financial assistance to help pay the bills.
Many people find that even with payment plan options, their medical debt is just too high and expensive. If you are in that situation, filing for 7 bankruptcy may be the best choice for you to deal with overwhelming medical expenses.
The Impact of a Low Credit Score
Many people think that the only time they need to worry about their credit score is if they are applying for a mortgage, car loan, credit card or any other financial transaction where they are asking to borrow money.
But there are several other reasons why a company may check your credit score – and having a low credit score could still have negative consequences.
Today, many companies run credit background checks on potential employees. Almost half of all companies run credit history checks on job applicants in order to reduce the risk of embezzlement or theft. Some companies run checks to decrease the risk of any legal liability for “negligent hiring.”
Utility companies also will pull a credit history report on new customers. Although having a utility account where payments are made on time does not show up on your credit history, having an old account where you still owe utility money will show up. Utility companies also check out your credit score. Owing an old utility bill or having a low credit score could affect your ability to obtain service. If the company does decide to do business with you, they could require a deposit or co-signer.
Many property owners will only rent to tenants who have good credit history. A landlord could have you sign a consent form, along with your rental application, to pull your full credit history. If you have a low score and poor credit history, landlords could view this as a poor risk tenancy and decline to rent to you.
If you are struggling with medical debt that has affected your credit score, or any other type of debt, you may want to consider filing for bankruptcy to get back on track and rebuild your credit. Contact an experienced debt collection lawyer in Tampa, FL to find out what your options may be.
Thanks to The Law Office of Michael A. Ziegler, P.L. for their insight into bankruptcy law and the effects of medical bills on credit scores.