Medical collections can be a huge problem for anyone trying to repair their credit.
All it takes is one unexpected bill your insurance won’t cover, and you’re up s**t creek without a paddle. These bills can be massive, too, so you may not always find the money to pay them.
And as much as we wish they would, these debts don’t magically disappear if you don’t pay them.
What actually happens is medical providers sell these debts to collection agencies for pennies on the dollar. These debt collectors then add interest and harass you for the full amount.
It’s not uncommon for the collection agencies to also double or even triple report these accounts to the credit bureaus. This means that to potential lenders, it looks like you’ve got more debt than you actually have!
It’s a horrible system, designed to benefit only the debt collectors and healthcare providers.
But that doesn’t mean you have to lie down and take it — there are ways to fight back AND WIN!
In this post, you’ll learn everything you need to know about medical collections and how to delete them from your credit report:
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How do medical collections affect credit scores?
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When do medical collections appear on a credit report?
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Effective strategies to remove medical collections from your credit report
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Frequently asked questions about removing medical collections
How do Medical Collections Affect Credit Scores?
Medical collections are unpaid medical bills that have been sold to a collection agency. This happens when a patient has missed several payments on their medical bills.
And considering half of U.S. adults are in debt because of medical bills, this happens A LOT .
Unpaid medical debt can stay on your credit report for seven years from the original delinquency date.
And because payment history is the biggest single factor in your credit scores (accounting for about 35% of your FICO score), having a collection account such as unpaid medical debt in your credit history can have a big impact.
It’s not all bad news, though…
As of July 1st, 2022, the top credit bureaus removed all paid medical collection debt from their reports. And since 2023, they no longer report medical debt under $500.
Also, the latest FICO credit scoring models give less weight to unpaid medical collections than to other collections.
This means that even if you do still have outstanding unpaid medical collections on your credit score, they won’t have the same impact as something like a credit card or loan.
When Do Medical Collections Appear on a Credit Report?
Medical debt is handled a bit differently than other types of debt. This is because most healthcare providers don’t report debts to credit bureaus.
This means that for your debt to appear on your credit report, the healthcare provider would have to have sold it to a collection agency. Only then will it appear.
Generally speaking, this won’t happen until you’re 60, 90, or even 120 days past due, depending on your healthcare provider.
But even after your debt has been passed over to a collection agency, your account still won’t show up on your credit report straight away, if ever.
This is because the three main credit bureaus (Experian, TransUnion, and Equifax) give you a 365 day grace period to resolve the debt before the account appears on your credit report.
As I mentioned earlier, any medical debt below $500 will never be included.
Beyond this one year period, it will entirely depend on the collection agency themselves.
If you’re lucky, they won’t report it…but I wouldn’t hold your breath!
Effective Strategies to Remove Medical Collections from Your Credit Report
If that ship has already sailed, and you’ve discovered a medical debt on your credit report, don’t worry — I’ve got you covered!
There are still several things you can do to remove these from your report.
Let’s get into them…
Check for Statute of Limitations
A statute of limitations (SOL) can’t directly remove collections from your credit report, but it can indirectly protect you from legal action. It can also potentially influence a collection agency to be more willing to negotiate or remove a collection.
Each state has a statute of limitations that sets a time limit for creditors to sue you for unpaid debts. These limits typically range from 3 to 6 years, depending on the type of debt and state laws.
Once the SOL expires, the creditor loses the legal right to sue you to collect the debt. But the debt does still exist, and it can stay on your credit report for up to 7 years.
By finding out the SOL in your state, you could use this as leverage either in negotiating a reduction, or requesting a removal.
When the debt is past the SOL, the agency is much less likely to prioritize your debt, which can make it easier to sway them.
Goodwill Letter for Paid Collections
Another approach you can try is a goodwill deletion letter, which is less effort and low risk, but also less likely to work.
A goodwill letter is essentially a polite request to remove the collection from your credit report. You’re asking the collection agency for forgiveness, and to remove the negative mark.
You have the best chance of getting a goodwill adjustment if you tick these boxes:
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The debt is small
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You have a solid track record of on-time payments
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You have a good reason for missing the payment in the first place
That last one is especially important, as you should give the agency a reason to feel empathy for you. Make it clear there was a real reason you missed the payment, and explain how this impacted you.
Request for Validation of the Debt
A debt validation letter is a request for proof that a specific debt belongs to you. You send this to the credit bureau, who are legally required to respond with this proof.
If they’re unable to prove it belongs to you, then they have to remove it from your credit report.
This might happen because the debt legitimately doesn’t belong to you, or because they simply haven’t got the documentation to prove that it does.
So even if you know the debt does belong to you, it’s still worth a try just in case they don’t have the means to back it up.
And even if they can, that’s fine. It can still be used to kick-start the debt negotiation process.
Dispute Inaccuracies
If the credit agency is unable to validate your debt, the easiest way to get rid of it is by disputing it.
You should start off by sending a dispute to the collection agency. But if that doesn’t work you can also dispute the debt with the bureaus themselves.
Credit Repair Cloud users also get a free Validation of Medical Debt (HIPAA Request) letter as part of their account.
Or you can sign up to get our 5 free dispute letters from our website.
Negotiate with the Collection Agency
If the medical debt on your credit report is valid, that doesn’t mean you’re out of options.
You can contact the collection agency to negotiate a settlement offer or payment plan for the debt. Here’s how you do it:
- Be polite and professional: When you approach the agency, make sure to be calm and respectful. The last thing you want to do is piss them off.
- Express your willingness to pay: They will only listen if they know you’re willing to pay something. But make it clear you can’t afford the full amount.
- Make a settlement offer: You can then propose a lump sum payment or payment plan based on your budget. Start with a significant reduction. They can always negotiate back up if they’re not happy with the offer.
Once this is agreed and paid off, the debt will be removed from your credit report.
Setting Up a Payment Plan
As I already mentioned in the negotiation strategy, it’s worth considering setting up a payment plan.
This is where you agree to smaller monthly installments to pay off the debt over a longer period.
This won’t immediately remove the collection from your credit report, but it’s a show of good faith to the agency, and it brings you a step closer to getting the debt paid.
The collections agency will almost certainly agree to this, too. It’s in their best interest to work with you to find a payment plan that you can afford, rather than risk you defaulting on the debt altogether.
[Advanced Disputing] Utilizing HIPAA Regulations
There is one more card up your sleeve when removing medical collections from your credit report — The Health Insurance Portability and Accountability Act.
Also known as HIPAA.
The main focus of HIPAA is preventing anyone from abusing our personal health information, which includes collections agencies.
If your healthcare provider has disclosed any information about the treatments or procedures they provided to the collection agency, they will be in violation.
This can be your secret weapon in getting your medical collection removed from your credit report.
For more detailed information on how to do this, check out my blog on how to delete medical collections by identifying HIPAA violations.
Frequently Asked Questions About Removing Medical Collections from your Credit Report
Can medical collections be deleted from credit report?
Collections can be deleted from your credit report after 7 years, or if they're inaccurately reported. You can also negotiate with the collector or dispute the debt with the credit bureaus.
What credit bureaus remove medical collections?
All three major bureaus (Equifax, Experian, TransUnion) stopped reporting medical collections under $500 as of April 2023.
How do I remove medical collections from my credit report without paying them?
Medical collections will disappear from your credit report after 7 years, but you shouldn’t wait until then. You can dispute errors, negotiate, or identify HIPAA violations to get the collection removed sooner.
Do medical collections go away after seven years?
Medical collections disappear from your credit report after seven years, just like other debts. But that doesn’t always mean you don’t owe any more money.
Do medical bills affect your credit when buying a house?
Unpaid medical bills can affect your credit score, impacting mortgage approval. Smaller collections (less than $500) are now ignored, and paid collections are removed, but larger, unpaid ones can still cause trouble.
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