"The New York Times" reported in a December 2010 article by Walecia Konrad that hospitals and doctors rarely report bills to credit reporting bureaus but frequently turn unpaid bills over to collections agencies within a few months. Once a collection agency has the bill, the agency can, and often does, report the bill as delinquent to a credit bureau. Delinquent accounts stay on your credit report for seven years, which is how long they will affect your credit score.
Credit Scores
A delinquent medical bill appears on your credit report once a creditor reports it. Credit bureaus and lenders use the activity found in your credit report to compute a credit score. In other words, the bill does not appear in your credit score, but by appearing on your report, it affects your score. The purpose of the credit score is to summarize your risk as a borrower in a number, allowing potential lenders to compare potential borrowers easily.
Time
Most negative entries remain on your credit report for seven years, including all delinquent bills or accounts in collections. However, the financial information website Bankrate notes that recent information affects your score more than old information. As a result, medical bills drag down your score less and less as time goes by.
Removing Entries
Bankrate warns that erroneous information regarding accounts and charges occasionally end up on individuals' credit reports. Bankrate recommends requesting credit reports regularly and disputing any erroneous charges, which include debts you never incurred or bills you paid but appear on the report as delinquent. You can receive a free copy of your credit report once each year through AnnualCreditReport.com. from each of the three major credit bureaus -- Equfax, Experian and TransUnion. Credit bureaus must investigate disputes, but you must have the documentation to prove that the account is not yours or is not delinquent.
Preventing Negative Reports
"The New York Times" recommends making an extra effort to stay in the loop regarding your medical bills. It reports that doctors, hospitals and insurance companies do not do a comprehensive job at keeping patients updated on the state of their accounts and are quick to turn unpaid bills over to collections agencies, which may report smaller bills to credit agencies without notifying the patient. "The New York Times" recommends staying in contact with billing departments until a bill is paid by you or your insurance provider and requesting that bills not be sent to collections. Once a bill goes to collections, the report advises calling the collections agency, stating that you will pay the bill if it is removed from your credit report and paying as fast as possible.
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