Updated: Jul 27, 2021
Medical bills are the leading cause of bankruptcy according to many financial sources. Unfortunately, many people neglect their medical bills without realizing the impact that those unpaid bills could have on their credit score. How Medical Bills Can Harm Your Credit After you receive medical services, your physician or hospital will bill you for any portion that wasn’t covered by insurance. Just like any other bill, medical bills have a due date. If you don’t pay by the due date, your bill becomes past due. Hospitals will only send you so many past due notices before they give your account to a third‐party debt collector to resume collection efforts. When the debt collector receives your medical bill, one of the first things it will do is report the account to one or all of the three major credit bureaus (Equafix, Experian and TransUnion). The medical collection account is considered a serious delinquency and can remain on your credit report for up to seven years, the maximum amount of time permitted by law. Your credit score - the number creditors and lenders often use to approve your applications for new loans and credit - is based solely on information that's in your credit report. Since having a collection account on your credit report indicates you have a serious delinquency in your credit history, your credit score will drop when a new collection is added to your credit report. The more medical collection accounts you have, the lawyer your credit score will be. Protect Your Credit From Medical Bills One of the easiest ways to keep medical bills from impacting your credit score is to pay your bills when you receive them. If you can't afford to make payment in full, contact the hospital's billing department to make payment arrangements. Even if you have health insurance, don't assume that your insurance company will always handle bills in a timely manner. If you receive a bill that should have been covered by insurance, contact your insurance company to find out why the bill wasn't paid. It could have been a simply oversight by hospital billing or the insurance claims department. Insurance companies often cover only a certain percentage of medical bills, so you might be responsible for some portion of medical debt after the insurance company has covered its part. To be safe, contact the hospital or physician billing department to check the status of your account, especially if you've received any medical services within the past year. Just because the medical bills aren't on your credit report doesn't mean they don't exist. By contacting the medical provider, you'll be absolutely sure you don't have outstanding medical bills that could harm your credit.