Medical Collections - Silent Credit Score Assassins
What impact does a medical collection have on your credit?
If you are like most consumers, you'll probably have to find out the hard way. In a study by the CFPB, 52% of all debt on credit reports are from medical collections. That means that more than 100 million consumers could be victims of these silent credit score assassins.
Regardless of your income or previous credit history, medical collections are a silent threat to your credit profile.
It's important to understand that the ethics and processes of collecting upon medical collections are questionable, at best. (i.e. here's a link of comedian John Oliver buying erroneous medical debt) Because of the murky limitations on collecting medical collections, consumers are easily manipulated into paying on medical debts that could be in violation of the FCRA.
To help clarify, what does it mean to be in violation of the Fair Credit Reporting Act?
- When the account is Inaccurate.
- When the account is Unverifiable
- When the account is Misleading
- When the account is Outdated
Normally, when we are dealing with medical collections, we encourage our clients to be vigilant as the burden of proof is upon the individual to ensure that their credit report is accurate. This means that simply waiting out the statute of limitations isn't a viable plan to find a real resolution to medical collections.
If you're dealing with medical collections, here are some tips on ensuring that you find a positive resolution.
- Stay Vigilant: If you are receiving collection notices for medical collections, you have the right to request proof of the debt in writing. Normally, the collections agency will provide that information within 30 days.
- Validate Your Sources: If you had insurance during the time of the medical expense, send the collection notice to your insurance company and file a dispute with them directly.
- Request Everything in Writing: If your insurance processes the dispute, provide the written notification from the insurance company to the collection agency.
- Go to the Bureaus: If you are unable to get the account resolved, and believe that account is inaccurate, you have the right to dispute that account with the credit bureaus.
- Seek More Expertise: Collection agencies are getting more aggressive, but they also are becoming more willing to negotiate on the outcome of how a medical collection reports on credit. If the account is valid, you can avoid taking a serious hit to your credit score by aggressively negotiating.
These stealthy credit score assassins can end up costing you thousands.
Don't let medical collections harm your ability to credit qualify for future purchases (like an upcoming home loan). Stay vigilant, seek expertise, and exercise your right to ensure that your credit report is accurate.
For more information regarding medical collections and your rights as a consumer, I've included a few useful links below.