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Medical Debt is Bringing Down Credit Scores

Debt is avoidable. If we pay our mortgage each month and pay off our credit cards we can stay out of debt right? Well other circumstances can cause credit scores to drop, and we might not even be aware they exist, such as medical debt.

In a recent report from the Consumer Financial Protection Bureau, they discovered that about 52 % off all debt on consumers' credit reports are from medical debt. The CFPB say that over 40 million people in the United States have medical debt bringing down their credit report. Of those 40 million about 15 million only have debt from medical expenses on their reports. Many people who carry medical debt do not even know they have a debt or that it is hurting their credit score.

Debt collectors are a big part of the rising medical debt problem. Debt collectors may harm a consumer's credit even before they are notified they have a debt. They use this tactic to motivate debtors to pay off bills faster, however that is not fair to consumer's to be hit with a bad credit score before they even realize there is an outstanding bill. However, debt collectors are not the only problem. Patients frequently do not learn the cost of medical services prior to receiving their treatment. Therefore they are served higher medical bills then they expected.

There are ways to avoid getting into medical debt:

Control your medical expenses by choosing a provider in your network and shopping around to see who can offer the best price.

Remember to save for high-deductibles that might need to be paid before insurance companies pay off remaining cost.

Check for errors in your medical bills by making sure what is covered by insurance is correct and only the procedures you received are on the bill.

Check your credit report every four months from one of the three credit bureaus for errors; if errors are present make sure you dispute them.

Finally, pay off debt as quickly as possible. It has recently been announced that medial debt that has been paid off this year, will no longer hurt your credit report. Americans will see a huge difference in their score due to this change.

Medical debt is a huge contributor toward America's debt problem. If you are one who finds yourself overwhelm with medical debt and being harassed by debt collectors, do not hesitate, call an attorney who is able to help you manage your debt and seek a solution that is right for you.

 Work cited:

The Unknown Debt That's Dragging Down Your Credit Score

            (Time) http://time.com/money/3629764/medical-debt-cfpb/

 

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