Many people believe that medical debt is reported to the major credit bureaus and will result in damage to their credit scores. However, this isn’t necessarily true. In fact, medical debt won’t be reported to the credit bureaus as long as it stays with the original service provider.
For this reason, it’s a good idea to talk to your medical provider if you’re struggling to make payments. If you can keep the bills in-house, you’re less likely to see them negatively impact your credit score in the future.
When does medical debt go to collections?
Normally, medical debt goes to collections when it is at least three months past due. Then, the credit bureau has to wait another 180 days before reporting that it is past due.
This extends how long you have to pay for medical debt, and there’s a good reason for the delays. Many times, insurance issues need to be worked out, and that can take many months.
How can you pay your medical debt if it’s going to go to collections?
If you have the ability to do so, it may be helpful to use a 0% balance transfer credit card to pay off the debt. That kind of card will usually give you several months to pay off the balance without needing to pay any interest. If you feel that you’ll be able to pay off the debt if you only have more time, then this is a good option.
You might also consolidate the debt with a personal loan. Lower interest rates are available with personal loans, which makes it possible for you to pay down what you owe without as much interest as a credit card would rack up.
Before you try to consolidate or pay off any medical debt, it’s smart to go over the bills and to determine why they are as high as they are or how the medical provider came up with the total. You may be surprised to find that a mistake was made or that a specific claim didn’t go through.
If you find that the debt is legitimate and you need to pay it, then try one of the above options. If you cannot, then you may want to look into bankruptcy as a potential solution.