Why Refusing to Pay Your Medical Bills Could Hurt You More Than Them

From the Associated Press:

For about 43 million people, or 1 out of 5 credit reports, there’s overdue medical debt, according to the Consumer Financial Protection Bureau. For 15 million people, medical bills are the only overdue debt on their credit reports.

Clearly, many of us are having trouble paying our medical bills — or thinking they have been paid when they haven’t, since many ricochet between health care providers and insurers, sometimes for months.

The latest versions of the FICO and VantageScore credit scoring models treat medical debt less harshly than other collections, but most lenders use older versions of the scores. The toll can be significant: A single collection account can drop a 680 FICO score by 40 points and a 780 score by 100 points. (The most widely used credit scoring formulas, such as the FICO 8, use a 300-to-850 range.)

Here’s what to do instead: “If you have health insurance, follow up on every medical bill you receive to make sure it gets paid. If you don’t have insurance or can’t pay your bill, ask health care providers if they have charity programs or payment plans that could make the costs more manageable.”

For more information on the issues surrounding medical debt, please contact RIP Medical Debt.