One way to quickly get over your head in debt is to get seriously ill. The cost of doctors, medications, treatments, therapies and hospital stays can quickly add up even if you have insurance. Meanwhile, at the same time you've been sick, your ability to earn a living has been hampered. Either one of those things could easily put you behind in your payments -- and both together can be crippling. Unpaid medical bills can't be ignored, though, because they do affect your credit.
How Doctors Handle It
When doctor and hospital bills go overdue, someone will contact the patient and try to arrange for some sort of payment to be made or to put the patient on a payment plan. When it's not the patient at fault but the insurance company, someone will be in touch with the insurer trying to get payment. Even if it is a problem on the side of the insurer, it will be the patient's credit score that is affected. Once the bills are 90 days overdue, then doctors and hospitals begin to send them to collection agencies. This is when the overdue bill affects your credit score and can indicate that you are a high risk.
How It Affects You
Although you may have unpaid medical bills on your credit record, they may not affect you. A lot depends on how the lender you are seeking credit with considers the overdue bills. In some cases, mortgage lenders will require that the borrower pays off high medical bills as a condition for loan approval. Regardless of how the lender views it, overdue medical bills will lower your credit score.
How Long It Remains
Once your overdue bills have gone to a collection agency and been reported to the credit agencies, then the negative mark on your record will remain there for seven years. After that time, you can ask for it to be removed if it doesn't happen automatically. In order for it to be removed earlier than that, you need to show that there was a factual error that led to it appearing on your credit report in the first place.
Your Options
If you have unpaid medical bills showing on your credit report, you can do one of four things to address the situation. You can pay the bill off, dispute it as factually incorrect, explain the bill with a statement that credit agencies will attach to your credit report or ignore it or wait for the seven years to pass.
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