Does an Unpaid Dentist Bill Affect Your FICO Score?

In 2010, a Salt Lake City, Utah, resident lost her home due to a 15-year-old unpaid dental bill worth $68. If you have an outstanding dental bill, you will probably not lose your home, but instead destroy your credit rating. Like any other debt, unpaid dental bills can go on a credit report if left ignored.

Identification

An unpaid dentist bill can affect your FICO score if the provider reports it to the credit bureaus or sends it to a collections agency. Once a collections account shows up your report, it will probably lower your score by dozens of points, because it is a seriously negative item -- in vein with other defaults like bankruptcy and repossession. The FICO formula is secret, and the actual impact on a score depends on other items on your credit score.

Should You Pay the Bill?

If the dentist has yet to report your unpaid debt or send it to collections, you might want to pay it off before he takes action. Once a collections account goes on a credit report, it sticks there for seven years unless it was listed in error. Paying a bill in collections does not help your score, but does look better to creditors than leaving it open. The best you can do for your score is pay the amount in full to avoid a settled account.

Paying the Bill

Medical and dental providers generally hope to avoid reporting delinquent bills and dealing with debt collectors. If you cannot pay a bill immediately, try to work a payment plan you can afford. You could borrow money from friends and family, sell an asset such as an extra car or borrow against or cash in a life insurance policy.

The Future

In September 2010, Congress attempted to pass H.R. 3421:Medical Debt Relief Act of 2010 to prevent credit reporting companies from listing paid dental/medical debt on a consumer report. This bill passed in the House of Representatives, but as of January 2011, remains stuck in the Senate.

Tip

It is common in the lending industry, especially among mortgage providers, to ignore medical collections accounts when calculating a FICO score or approving a loan. You should, however, check with the lender to see how he feels about the unpaid bill.