Medical Debt and Credit Repair
We have discussed topics related to your financial health, especially your credit score. Our purpose has been to draw your attention to important factors that affect your credit score, perhaps without your knowledge. The following statistic may come as a surprise: the Federal Reserve has stated that 17% of credit reports have at least one item related to medical debt.
Medical Debt and Credit Repair
The reason this particular factor takes many people by surprise is that they don’t expect unpaid medical bills to affect their credit scores. The fact is that it does. This has been underlined by many financial experts who agree that medical debt pulls down your credit score, which in turn leads to higher borrowing costs, interests, and fees.
The Damage to Your Credit Score
In our experience dealing with medical debt, we can ensure you that it feels like the rules and regulations operate in an upside-down universe. For one, the higher your credit score, the more a negative item will affect it. We have encountered cases where up to 100 points have been reduced from a FICO score.
The other thing is that unpaid bills are pursued by collection agencies who operate on a level of pure commerce. They will choose the account that will pay them the most, and send a single notice to the other debtors before reporting them to the bureaus.
If you have items of medical debt on your financial report, credit repair can be an effective measure that reduces the damage and protects your FICO score.
Protecting Your FICO Score
Enlisting the services of a professional credit repair agency can go a long way in safeguarding your score against medical debt. Here is how the agency will work to limit the damage:
- They will comb through your credit report and verify unpaid medical bills. After consulting with you, they will contest any item that is erroneous.
- They will contact the debt collector or the concerned medical provider to ascertain information of your credit history and obtain the bills in question.
- They will apply relevant offsets that include insurance, insurance co-pay, previous payments, non-insured discounts, and Medicaid/Medicare/VA benefits.
The third point is one of the most important factors. There are times when a hospital or medical care provider may not apply your medical insurance to a bill, which then reflects on your report as an unpaid item.
Like any other form of debt, medical debt can take a toll on your credit. We understand that this form of debt and repayment can be extremely frustrating to manage; most people do not anticipate having large, unexpected medical expenses. If you’re dealing with medical debt, it’s important that you investigate your credit report. We can help you. At Action Credit Repair, our experts will provide a personalized credit consultation, an audit of your credit history, and offer solutions to all of your credit obstacles. Contact us today to speak with an experienced professional: Call 518-945-2299 or email [email protected].