subject: Fact: Credit Scores can become Ugly with Unpaid Medical Bills [print this page] Fact: Credit Scores can become Ugly with Unpaid Medical Bills
There are instances when miscommunication happens between the insurer, hospital, and patient; this will result to unpaid medical bills which in turn can damage the patient's credit scores. Due to the complexity of the payment process in hospitals, patients oftentimes fail to check if they have paid their account yet. When this happens, patients will most likely receive a call from the collector officer. Furthermore, their credit reports will be tainted due to the delinquent hospital bill record. Survey shows that unpaid medical bills accounted to over 5 out of 10 bankruptcy filings in the United States, even Americans with health insurance are included in the survey.
Be careful when you have received a collection call because if you cannot clear your account and have not proven that the unpaid medical bills is only due to miscommunication, the hospital record on your credit report will remain and it may stay for up to 6 years. Before, unpaid hospital bills that amounts to 5 hundred dollars and below will not damage your loan application as lenders will usually disregard it. However, because of economic downturn and the growing number of bankruptcy filings, lenders are more wary in approving loan requests. Now, lenders usually require their borrowers to have a credit score of 750 and above to keep requesting for loans.
When you have to pay the hospital bills, always check if the process has been completed and that your forms are correct. If in case you have trouble with your insurer, immediately tell the hospital that the medical bill is still being reviewed to avoid going to collections. When your bills do get into the collection mode, go to your credit agency immediately and assert your rights. They cannot use the hospital record as a measurement of your credit score as it is your insurance company's obligation to pay. Before calling your credit agency, prepare all the necessary documents that will prove that you are covered. Pertinent evidence includes the insurance manual, procedure details, physician, etc. if you have reported the incident; the credit agency will investigate your case within 30 days as the law mandated which is stated in the Fair Credit Reporting Act or FCRA.
If possible, you may settle the unpaid medical bills using your own money in order to prevent getting bad credits. Then you may work on receiving the reimbursement from your insurance company. The important thing is that your bill does not go to the collection mode because if that happens, it can severely damage your loan application capacity.
