How to Handle Medical Collections on Your Credit Report

Medical collections are a pressing issue for many consumers today thanks to inadequacies in the health care system in America. Medical collections are those that specifically pertain to an unpaid medical bill.

Such an account sent to collections will probably cause a negative effect on your credit scores. There are a few ways of addressing these accounts in regards to your credit reports. This may involve working with the three major credit reporting bureaus Experian, TransUnion, and Equifax to update any information that is old or inaccurate. 

If the account in question is accurate, you should be aware that it may stay on your credit reports for seven and a half years from the point it first went delinquent. 

This negative effect will decrease with the age of the collection account. Newer credit scoring models like FICO Score 9 and Vantage Scoring 4.0 place less emphasis on unpaid medical collection accounts than they do on other ones when generating your credit scores

The federal law NACP makes it illegal for any medical debt to be included on your report until at least 180 days after it was first reported as delinquent to them. The law also stipulates that any bills later paid by insurance must be taken off. 

If these scenarios do not pertain to you, you should start by writing the debt collector directly. Insist on your rights to have the debt validated. According to the FDCPA, they must furnish you with proof of your medical collection account debt in order to proceed with their efforts. You must request this in writing within five days of their first effort to contact you about it. 

Demand Proof of Debt

If you do not think you owe this money, it is sensible to demand proof of the debt before you take any other steps. The collector may not be able to verify your debt, in particular if you have already paid the debt or if it mistakenly belongs to someone else. It would make things far simpler to have the collection account taken off of your credit reports if this is the case. 

After you have your proof of debt, you can still file a dispute with the individual credit reporting bureaus if you feel there is an error. Any official disputes that you file you must do one by one with every credit bureau, generally through their website is much faster in resolution. 

If you have already paid off this debt but it is still illegally contained on your personal credit reports, you should send in documentation showing the payment in full. You could have payment records from the doctor or hospital to include, or a credit card statement or bank statement for proof of form of payment. 

The credit bureaus have a month to resolve your issue and respond. 

Finally, you should be intimately acquainted with the statute of limitations regarding your medical debts in question. It may be that they will fall off of your credit reports soon enough that you do not need to worry about them. Your legal liability is also limited by the statutes of limitations. Collectors may still trouble you, but they will no longer have the ability to sue you or file judgments past that point. 

Be careful about making even small payments on a time limited debt. This can cause it to be revived in some states, which resets the appropriate statute of limitations. 

It may be that you actually do not have the money to pay the medical bills. In this case, it is always possible to arrange for a settlement with the debt collector. You would consent to paying a more reasonable amount that you can afford in exchange for them marking the account as settled and ceasing future collection efforts to recover the debt. 

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