Updated: Feb 17
Have medical debt that’s got you stressed, or maybe it’s already gone to collection and you need to know what your next move should be?
No worries, you’re not alone.
According to The SIPP survey, it’s been discovered that people in the United States owe at least $195 billion in medical debt, (6% of adults) in the U.S. owe over $1,000 in medical debt, and (1% of adults) owe a medical debt of more than $10,000.
That’s despite having health insurance!
So what should you do, if you find yourself among the millions of Americans with unpaid medical bills?
How do you remove medical collections from your credit report?
8 simple ways this can be done
#1: Ask yourself, have my HIPPA rights been violated?
While this is a good question reporting your unpaid medical bills to collections is not a violation of HIPPA Laws.
The collection agency knows more than they should about you.
Here’s what I mean!
Although HIPPA does not regulate the collection agencies, it is against the law for collection agencies to know your diagnosis and treatment.
To gather that information, you can ask as many questions as possible about the medical bill to gain information about what they know. They may inadvertently know more than they should.
If they do, you can ask that the medical bill be pulled back by the medical provider or settle the debt by threatening a lawsuit for the violation of HIPPA Law.
Collection agencies will want to avoid a lawsuit, so learn your rights and investigate what they know about your medical diagnosis and treatment.
But if you find that HIPPA Laws were not violated, here are a few other steps to take to deal with medical collections.
Now that you know there was no violation of your HIPPA rights, you can dispute the medical bill to have it removed from your credit report.
Have the credit bureau investigate the collection agency to verify the bill is yours and/or that your insurance has not paid the bill.
It sounds shocking that you could pay a bill that has already been paid, but this happens all the time.
So don’t dismiss the thought that a mistake could happen.
Also, make sure that the bill is at least 6 months old, medical bills should not go to collections until they're at least 6 months old.
Sometimes, due to mistakes by the medical billing department, your bill could be sent to collections too early.
If that’s the case, file the dispute to get it out of collections and set up a payment plan with the medical agency.
#3 Pay Medical Bills
If you can afford to do so, you should pay your medical bills before they go to collection. If you can’t pay the full amount, you can set up a payment plan.
Make sure you get an agreed-upon amount in writing, this will ensure that you avoid collections for making payments that are too small or late.
Yes, your account can go to collections if your payments are too small.
But, if the medical bill has already gone to collections and you can afford to pay it, do so. You can also set up a payment plan with the collection agency. Again, get everything in writing to protect yourself.
#4 Bring your Bill below $500
If you get your bill below $500, it will not show on your credit report.
No, this is not fake news!
Beginning in July 2022, to give consumers relief, medical bills under $500 should no longer appear on your credit report.
So if you have a bill in collections and it's accurate, you can put yourself on a budget to pay it down to $500 or below, and it will not hurt your credit score.
#5 Ask Health Insurance to Pay the Bill
Remember, mistakes happen all the time, you may have a bill in collections that should have been paid by your health insurance.
This can be time-consuming but it’s well worth it. If you rely on the medical billing office or the insurance company to catch this mistake, you could be waiting until for-never.
So try to call your insurance yourself to verify whether the medical procedure should have been covered by them.
# 6 Ask for a Goodwill Deletion
If you have paid a medical bill in collections, but you're trying to make a major purchase and need it off your credit report quickly, you can write a letter of goodwill to have it removed.
This is not always a guarantee, but in most cases, it has been known to work.
Writing a letter of goodwill deletion can be challenging for some because it may be hard to figure out what to say.
Don’t go at it alone, find a goodwill deletion letter template to help you.
#7 Settle with Pay for Deletion
If you decide to pay off your medical bill, make sure you negotiate a “pay for deletion”.
You can get the agreement in writing, then pay the amount agreed and the collection company will delete the bill from your credit report once they receive payment.
This tackles two problems at once. You pay the collection and at the same time, you get it removed from your report.
If you're gonna pay for it anyway, you might as well get it removed at the same time. This will help you avoid having to write a goodwill deletion letter at a later date.
#8 Hire a Credit Repair Company
Normally, I’m a stickler for DIY, but dealing with your credit report can be overwhelming.
If you choose to, you can pay for help by researching a credit repair company. There’s no shame in it.
If you decide to go this route, make sure you ask questions and read your contract.
You want to make sure their credit repair services cover what you need. If not, you’ll just be adding a bill to your life.
How will unpaid medical bills affect my credit score?
If the bill is above $500, it can affect your credit score negatively. Remember, payment history makes up 35% of your credit score.
That’s a huge chunk of your factor. Therefore, if you're trying to raise your credit score, you don't want to ignore medical bills on your credit report.
If you’re trying to buy a home, it could affect your debt to income ratio which is a huge factor when it comes to getting a home loan approval.
Major Take Away
Medical bills can leave a stain on your credit report, but that stain can be wiped clean.
With a little investigating and knowledge, you can apply any of the above steps to have your medical bills removed from your credit report.
It’s a lot easier than you think. Why not start today?