Medical bills are causing a lot of problems for people. In fact, according to the Kaiser Family Foundation, nearly a quarter of all Americans are struggling to pay their medical bills —including those who have health insurance.
The good news is that even if you have been unable to pay your medical bills and it’s gone into collections, it is possible to remove medical collections from your credit report.
How Medical Collections Hurt Your Credit Score
First of all, it’s important to understand how medical collections affect your credit score. Before 2014, FICO (the most common credit scoring system) counted unpaid medical collections the same as any other collection and therefore it equally hurt your credit score.
However, FICO has since then changed their scoring system so that medical collections affect your credit score less than non-medical collections. In addition, paid medical collections will have even less of an impact than unpaid medical collections.
Nonetheless, it’s important to understand that while medical collections may have less of an impact on your actual credit score, a collection, even a medical collection, will often times prevent lenders from granting you a loan. This is particularly true with mortgage loans.
Changes in 2017
In September of 2017, the 3 major credit bureaus announced that they will be removing medical collections from credit reports that fit the following criteria:
- Medical collections less than 180 days old
- Medical collections that are paid by insurance
Therefore, if you have a collection that meets one or both of these criteria, don’t even worry about it because it should have been removed from your credit report automatically in September 2017. If you believe your collection does fit that criteria but it’s still on your credit report, you should dispute the entry with the credit bureaus.
How Long Medical Collections Stay on Your Credit Report
If you do nothing, that is, take no steps to remove your medical collections from your credit report, collections will remain on file for 7 years.
While older collections generally have less of an impact than newer collections, they still show up on your credit report. Also, as I mentioned before, lenders may deny you based on having negative items on your credit report.
How to Remove Medical Collections From Your Credit Report
When it comes to removing medical collections from your credit report, you have a few options. Let’s get into the steps you need to take in order to handle this situation.
Step 1. Validate That the Debt Belongs To You
Your first option is to validate the debt, which is your right under The Fair Debt Collection Practices Act. You basically write the collector a letter that demands that they provide proof that the debt is in fact yours. They have 30 days to respond. In your letter, ask that they remove the collection if they are unable to validate it.
The only potential problem here is that you only have 30 days from the time they first notified you in order to get this letter to them. Therefore, if they called or sent you a letter more than 30 days ago, you can still send the validation letter, but it might not work.
Step 2. Dispute Inaccurate Information
If the debt was validated, or it’s been more than 30 days since they contacted you, your next step should be to get a copy of your credit report and see if you can find any inaccurate information as it pertains to the medical collection.
You want to look for inaccurate information such as dates, balances, account numbers, names, etc. If you find anything that’s inaccurate, you should dispute the entry with the credit bureau.
They will have 30 days to investigate the dispute. If they are unable to verify that the information is accurate, and therefore unable to to correct it, it will likely be removed from your credit report.
Step 3. Have a Professional Remove the Collection
Lastly, if you’re the type of person who would rather have a professional handle it and just be done with the whole thing, I suggest you check out Lexington Law Credit Repair. They’ll take care of you, and honestly they usually get stuff removed a lot quicker. Check out their website.