Do Medical Bills Affect Your Credit?

After you experience an illness or injury, you may be left with medical bills. Unless you pay them off, your credit score can take a hit. Fortunately, you can cover your medical bills and keep your credit in good shape, even if you don’t have the cash on hand. Here’s what you need to know about how medical bills can affect your credit. 

How can medical bills affect your credit?

If you don’t pay your medical bills for many months, they’ll likely get sold to a debt collection agency. At this point, your payment history, which is the largest factor that determines your credit, will be negatively impacted. There’s a good chance your credit score will be lower than it was previously. 

How long will medical bills stay on your credit report?

Collections accounts from unpaid medical bills can stay on your credit report for seven years. The good news is their effect on your credit will lessen over time. This means you may still get approved for loans and credit cards in the future.

How to take medical bills off your credit report

If you believe you’ve paid off your medical bill but it’s impacting your credit report negatively, follow these steps:

1. Collect any necessary documentation

Find as many documents as you can to prove the medical bill was paid. These can be receipts or payment records from your hospital or doctor, credit card statements, or confirmation emails if you paid online. 

2. File a dispute with the credit bureau

Visit to pull free copies of your credit reports from Experian, Equifax, and TransUnion. Go through them carefully and dispute any errors that have been reported.

3. Check your credit report to see if the error was removed

According to the Fair Credit Reporting Act, credit bureaus must address all disputes. But it’s your job to communicate with them to find out the status of your dispute and provide more documents if they request them.

What to do if you can’t pay off medical bills

If you’re having trouble paying off your medical bills, here are some tips to help you out:

Negotiate your medical bills

Reach out to your medical provider and try to negotiate your medical bills down. You can also ask for an affordable payment plan that works well for your budget. If you’re successful, make sure you get the new amount you owe or payment plan in writing.

See if you qualify for financial assistance

Many low-income patients qualify for financial assistance programs, but hospitals and doctor’s offices don’t offer them upfront. Ask your medical provider whether any of their programs apply to you. You can also explore assistance through different non-profit organizations.

Use a crowdfunding site

A crowdfunding site like GoFundMe or Kickstarter can allow you to collect donations for your medical bills from friends and family. If you’ve helped them out in the past, they may be willing to do the same for you.

Get a personal loan

Even if you don’t have good credit, you can still get approved for a personal loan and use the funds to cover your medical bill. In many cases, you’ll get a lump sum of cash upfront and repay it over time through fixed monthly payments.

How to improve your credit score

If medical debt has hurt your credit, you can improve it with these strategies.

  • Pay your bills on time: Make it a top priority to pay all your bills on time. Timely payments on your credit cards, car loans, utilities, and other bills play the biggest factor in your credit score and can reduce the impact of medical debt.
  • Improve your credit utilization ratio: This is the percentage of your available credit that you're using. For example, if you have a credit limit of $1,000 and you owe $500, your credit utilization ratio is 50%. Lenders like to see a lower ratio because it shows that you're not maxing out your credit. Aim for a credit utilization ratio under 30%. To lower it, reduce your spending, increase your credit limit, and don’t close unused cards.
  • Monitor your credit: Check your credit reports and scores on a regular basis so you always know where you stand and whether you’re making progress. By keeping tabs on your credit, you’ll be motivated to continue to improve it.

Get an Advance America loan to pay your medical bills

Advance America offers a variety of loans that can help you cover your medical bills. These include payday loans, installment loans, title loans, and lines of credit. You may apply online and get your money quickly, sometimes within 24 hours. Visit Advance America today to learn more about the loans we offer.

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