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Posts Tagged ‘hospital bills’

In a word: yes, those old, alleged medical and hospital delinquencies can be removed from your credit report, but it will likely take some focused work on your part to get them eliminated. Sometimes, medical collection accounts show up on a credit report even after 7 years if a person has paid monthly payments on the debt or has somehow “reactivated” the account by giving lump sum payments, partial payments on settlement payments to get rid of creditors. In your case, you may not have done this, since you said you’ve always disputed the debts. Nevertheless, be aware that a medical bill alleged to be past due might take a year or so (could be more time; could be less) before it’s reported as a collection account. If you had a hospital bill they claimed you owed, from 2003, and it wasn’t reported to the credit bureaus until 2004, that information would remain on your credit report until at least 2011.

Here’s what to do: if the debts are, in fact, more than 7 years old, simply dispute them online at Equifax, Experian and TransUnion. When you specify a reason for your disputes, state that the debts are outdated. If you get nowhere with the credit bureaus, write to the hospital or medical institutions in question directly. Let them know that they are violating the Fair Credit Reporting Act by reporting a debt that is more than 7 years old, and issue a firmly-worded letter insisting that they cease and desist all such reporting to the credit bureaus.

I would not open a “few” secured credit cards, however, obtaining a single secured card and making on-time payments can definitely help you boost your credit scores. Paying consistently on a secured card will establish some positive payment history for you, which will help counter-balance (to a degree) some of the negative data that is currently in your credit files. Opening several cards will result in multiple inquiries and could further lower your credit scores. Before opening a secured credit card, just make sure the bank that issues the card does, in fact, report to the credit bureaus.

Other Credit-Boosting Steps
To get an even bigger boost to your credit rating, you should try to clean up some of the blemishes in your TransUnion, Equifax and Experian credit reports. If you can contact your previous creditors and offer then a small lump sum payment to settle your debts, in exchange for them removing the negative information on your credit reports, then that will enhance your credit rating. Only do this for recently delinquent accounts (i.e. those from the last two years). Also, only give up cash payments to those creditors who agree, in writing, to delete black marks from your credit. If they simply note the account as “Paid” but leave the old, negative information there, that won’t help your credit.

Improve Your Credit Without Taking On New Debt
You also mentioned that your car note is currently in good standing. That’s great, because at least you have one “traditional” form of credit in your credit file. A car loan is an “installment loan,” and the fact that you’re paying it on time is viewed positively in the credit scoring world. The other two forms of debt that get analyzed, from a credit scoring standpoint, are “revolving debt” (which is credit cards), and mortgage loans. The fact that you rent, and don’t own a home, doesn’t mean you can’t establish a good payment track record with those rental payments. Try using a service like Payment Reporting Builds Credit. Their website is www.PRBC.com. It allows you to document “non-traditional” forms of credit, like rental payments, child care costs, utilities – anything where you’re making regular monthly payments. The information gets tracked by PRBC and helps you build your credit history and show a potential lender or creditor that you’ve been paying various bills on time.

Pay Down Credit Cards and Pay Everything On Time
Also, just make it a priority to pay all your bills in a timely fashion. That’s the biggest factor in calculating your credit score. Lastly, if you do already have any standard credit cards (i.e. not secured cards), try to pay down those balances. A good target is to keep your credit card balances at 25% or less of your available credit, if possible. That too will increase your credit rating.

It will take multiple steps to help you eliminate your medical debt. But here are six strategies you can use to knock down those hospital bills and improve your credit rating.

Examine Everything

Start by going over all your medical bills with a fine-tooth comb. Question charges that seem inflated (like that $20 bottle of aspirin). Also, ask for explanations from your healthcare providers regarding invoices for services you don’t recognize or understand. Simply forcing them to account for everything may result is certain charges being waived or reduced.

Find Out About State Freebies

Lots of states offer their residents free mandatory coverage or health insurance with small co-pays and low deductibles. If any of your treatment should have been covered by a state program, see if state resources can fill the gap and pay what you’ve been charged.

Ask Directly for Discounts

Ask the hospitals, clinics and healthcare professionals that serviced you whether or not you qualify for any discounts, charity, or write-downs of your total bill outstanding. Don’t be ashamed to let the hospital(s) know about your entire financial predicament. They may be more lenient if they know that you’re not working, are not insured, have lots of other debts, are a single mom, etc.

Request a Payment Plan

If you can talk to a kindly, flexible billing representative/hospital administrator, or even better, the doctor(s) who treated you, ask if you can get on a payment plan. Try to stretch out the plan for as long as reasonable in order to give yourself time to pay off all that you owe. If they agree to discount $2,000 of your original $5,000 in bills, then you’ll have $3,000 remaining to pay off over time. If you can commit to pay that off in two years, that means you’ll have to pay $125 a month ($3,000 divided by 24 months).

Negotiate to Improve Your Credit Rating

Also, while you are negotiating, request upfront that the hospital agree to delete all negative references to your credit files. They may only do it once you’ve completed your repayment plan. But that’s better than letting the late payment or collection information sit on your credit reports for seven years. Get any agreements in writing.

Get a Medical Advocate

Don’t give up on negotiating down that medical debt, or to improve your credit standing. Sometimes you have to go to multiple people or write numerous letters. But it will be worth it in the end if you can rid yourself of thousands of dollars of medical bills. If your own efforts don’t get you anywhere, get help from a third party, such as Access Project (http://www.accessproject.org) or Medical Bill Advocates (http://www.billadvocates.com). For those with hefty hospital bills, The Access Project’s Medical Debt Resolution Program can guide you through the maze of negotiating with insurance companies, medical providers and public programs to resolve your medical debt.

Try to negotiate a settlement with the collection agency. Offer to begin a monthly payment plan that you can truly afford.

One of my newsletter subscribers had a question about how to best dispute a medical debt. She found out that a collection account for $1,879 appears on her Equifax credit report, based on a $2,000 surgery she had back in 2004. This individual (who is also unemployed) said she’d paid monthly on the bill at various points over the years, but then all of a sudden she stopped being sent monthly statements. So her question was:  Should I dispute this bill with Equifax, or should I go directly to the collection agency?

Here’s my reply.

Don’t start with a dispute to the credit bureaus over this matter — since you said this is a bill that you know you do, in fact, owe.

Start with the collection agency. Try to negotiate a settlement with them. Offer to begin a monthly payment plan that you can truly afford. Alternatively, if you can afford a lump sump payment to knock out the bill, even better — because you’ll also be better positioned to improve your credit rating.

If you have some cash on hand to make a lump payment on your medical bill, you can make a settlement offer of pennies on the dollar. For example, if your outstanding medical debt is still $1,879, you can say something like: “I have $900 that I am prepared to send you as payment in full for this debt. But in exchange for me making this lump sum payment, I would need you to DELETE all negative references to my credit reports.” This way you’ll be paying less than 50% of the bill, plus clearing up your credit report.

If the collection agency agrees, get everything IN WRITING (you write the letter spelling out the agreement) before you send that money. This strategy is called using a “Payment for Deletion” to clear up your credit. It often works, because collection agencies usually get collection accounts in one of two ways:

1) the account was “assigned” or transferred to them from a creditor, and they get paid on a commission basis, based on the dollar amount that they can collect from the debtor; or

2) they bought your debt for pennies on the dollar (they likely secured your $1,879 medical debt for just a few hundred dollars, if that). So any money they get above the amount they spent acquiring the debt represents a profit for them.

One last point: you said you were originally told your surgery was $2,000 …. that was 5 years ago, and you indicated you were paying it on at various times over the years. So if the amount they claim you owe is $1,879 (only $121 less than your original debt), it sounds like they probably tacked on considerable interest charges, penalties, and other fees. Try to negotiate on this basis also. State your case (i.e. you were never sent bills, tell them that you are unemployed, but only if you really still are, etc.) and then request that all late fees and finance charges be eliminated from the bill. That will help you knock down the debt. Also, if you end up not being able to reach any resolution, and you do in fact, dispute the AMOUNT of debt that you owe, then that’s when you would go to the credit bureau and dispute this item on your credit report. If you can’t clear this matter up, be aware that any negative references on your credit report stays there for seven years from the time you last went delinquent (i.e. if you last payment was made in Nov. 2008, this item would stay on your credit report until Nov. 2015).

Hope this info helps. Good luck!