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Medical bills may have less impact on credit score

Too many Tennesseans struggle with medical debt. An unexpected disease or an accident could leave an individual with unmanageable debt, leaving him or her concerned not only about his or her physical health, but also about his or her financial well-being. One aspect that may worry those who have medical bills is how the debt will affect their credit.

There is good news for those who are concerned about this issue. According to credit score calculator FICO, overdue medical bills that have been settled will not be used when calculating credit risk. Additionally, medical debtors who have overdue bills that have not been settled will have their credit score increased by a median of 25 points, as FICO intends to utilize a new scoring system that lessens the impact medical debt can have on an individual's score. The new system will not place the same amount of weight behind medical debt as it does to credit card debt and other uncollected debts.

Despite this good news, it may be too little for some. Too many individuals find themselves amidst insurmountable medical debt, and desperately need help. However, these individuals should take comfort in knowing that they can find debt relief and even debt elimination.

For a lot of Tennesseans facing financial challenges, filing for bankruptcy might provide them with the help and protection they need. Bankruptcy, though often thought of negatively, is a real way for individuals to reclaim their financial health by either eliminating debt through Chapter 7 or restructuring it into more manageable payments through a Chapter 13 bankruptcy. Therefore, those worried about their financial future should be proactive and consider discussing the situation with an experienced attorney.

Source: Insurance Journal, "FICO to Downplay Medical Debt in Credit Scores," Amrutha Gayathri and Emily Stephenson, Aug. 14, 2014

Source: Insurance Journal, "FICO to Downplay Medical Debt in Credit Scores," Amrutha Gayathri and Emily Stephenson, Aug. 14, 2014

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

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