How does your bill affect a patient’s credit once it’s placed in collections?


A good agency knows that sometimes the best leverage to get an account paid, especially for low balance accounts, is a person’s credit report. A common misconception is that medical bills do not show up on a credit report. This is not true. The misconception originates from certain creditors excluding medical debt information from their decision algorithms. The best example I can give is Tenant Screening. Many properties specifically exclude medical records from their decisions because they know that most people pay their bills in order of priority, and rent is traditionally higher on the list than medical bills. But for most credit granting situations (car loans, mortgages, credit cards etc.) your medical bill will absolutely affect the decision.

In this economic climate, it’s much more common, and unfortunately more acceptable, to have less than good credit. However, given the opportunity, most people would choose to not have something on their credit if they can avoid it in anyway.

Low Balances – It may seem counterproductive to report a smaller medical debt; however these are the most common to get paid. When a person decides to clean up their credit, either by choice or necessity, they tend to tackle the easy/low balance ones first.

Too Old To Report – Check your State’s statute of limitations on past due debt, this will be the reporting limit for your debt. It’s important to remember that the delinquency date is the correct date to use as the reporting date. So in other words, if your office has 30 day terms, the account is considered delinquent on day 31.

Reporting Disputes – In many cases, a patient’s first reaction to fix their credit reports is to dispute everything. The hope is that you (the creditor) will not have the proof to back up your claim. Proper documentation will make this an obvious dead-end for the patient and they will now have just validated the claim for the bureau.   

Judgments – If your patient owed a significant amount (typically over $1,000) then your agency may have recommended obtaining a judgment. Judgments are certainly not a guarantee that you will get paid, but definitely holds more weight than just reporting the debt to credit. Also, judgments can be re-filed and have their reporting term extended up to 20 years in some States.

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