When you’re sick or injured enough to need significant medical care, the last thing you want to think about is how you’re going to pay your medical bills. Even more distressful is just how much medical bills on your credit report can impact your financial future. And with medical bills remaining the largest factor for Americans declaring bankruptcy, it’s clear that the nation’s largest epidemic is actually medical debt.

medical bills

So what you can you do keep medical bills from ruining your finances? Is there a way to get your credit back on track once you’ve been saddled with immense medical debt? It’s not always easy, but there are strategic actions you can take to decrease the effect medical bills have on your credit score. Read on to find out what they are.

How Medical Bills Affect Your Credit

The good news is that medical debt only affects your credit if it goes to a collection agency. The bad news is that there is no way to know how quickly your medical provider sends unpaid bills to collections. However, recent rules have been implemented by the credit bureaus to help make the process more transparent to consumers once the debt is reported.

For example, Experian, Equifax, and TransUnion now wait until a medical bill has been delinquent for 180 days before adding it to a consumer’s credit report. This is helpful because the health insurance process is slow and even if something is covered, even partially, reimbursements may take time to process. As soon as you find out your debt is going to collections, it’s wise to figure out what the date of delinquency. Then you’ll know how much time you have to get the outstanding bill taken care of.

Once it’s on your credit report, your medical debt is displayed as an unpaid collection, and it will stay there for seven years. When you pay it off, the item is then shown as being paid, and still remains visible on your report for the remainder of the seven years. Your credit score takes a big hit at the beginning, but the collection counts less heavily as time goes by.

Currently, all unpaid collections are equally weighted on the FICO 8 scoring model, but the newest version, FICO 9, does not count medical as heavily as other types of debt. Unfortunately, it’s likely to take time for the majority of lenders to implement the new scoring model when analyzing loan applications. VantageScore 3.0 doesn’t count paid collections at all but isn’t used as widely as FICO.

Even if you don’t know of any medical debt on your credit report, it’s smart to check your report every year just to make sure. You can get all three of your credit reports for free to ensure all your information is accurate.

Collection agencies are required to follow specific protocols for notifying you of delinquent medical bills, but they don’t always do that. Plus, even if you’ve paid off a collection, there may have been an error in updating the status from unpaid. So check your report to make sure an obscure medical collection isn’t dragging down your credit without your knowledge.

Get Ahead of Your Medical Debt

Just as it is with our physical health, prevention is the best cure for our financial health. Once you’ve recovered from your medical issue, start figuring out what your bills are going to look like. Find out what expenses will be covered by your health insurance company and what you’ll be responsible for yourself. Do this as soon as you can. Then, you won’t be surprised by any bills that arrive in the mail with a looming payment deadline.

Prepare in advance as much as possible so you can start making payments. It’s an unfortunate reality you have to deal with even when you’ve already been through health issues.

Pay Your Bills Monthly

When you first receive a bill and can’t pay it off right away, contact the medical provider to find out if you can sign up for a monthly payment plan. Payment plans with hospitals and doctors offices typically don’t charge interest, and they shouldn’t send the medical debt to a collection agency if you make regular payments.

You can also consider applying for a low interest personal loan in the event your provider doesn’t offer monthly payments. It’s never ideal to have to pay interest on top of the principal balance, but it could prevent you from having the account go into delinquency and show up on your credit report.

Negotiate the Bill

You also have the option to negotiate with the medical facility. Most providers would rather receive partial payment than no payment at all, and it also saves them the hassle of sending the delinquent amount to a collection agency. Simply call the billing department and ask for a better rate.

It’s also helpful to confirm that you’re being billed the correct amount. Since health insurance companies often negotiate lower rates, you should still be eligible for those rates when you’re picking up costs through a deductible — but those savings aren’t necessarily reflected in your bill.

Ask for Forgiveness

Another tactic is to ask for balance forgiveness altogether. Again, this can be done directly through your care provider and should be attempted before your debt goes to a collection agency. Write a letter to the provider explaining your financial situation and how burdensome your monthly payments have become.

This is most effective if your health insurance company charged the care as out-of-network because they will have already paid the provider for in-network services. That means the provider has already received some payment for the work completed. This tactic isn’t a sure thing, but it’s definitely worth the try when your debt is weighing you down.

Make an Agreement with the Collection Agency

In the event that you can’t make payments and a collection agency does contact you, offer to pay right away with the contingency that they don’t report your medical bills to the credit bureaus. Hopefully you can work out some sort of payment plan to get back on track, even if it takes a while. You want to avoid having any medical collections appear on your credit report at all costs. Not only are they difficult to remove once they are on there, just one medical item can drop your credit score by as much as 100 points.

What to Do with Medical Collections on Your Credit Report

Even if you try your best to get on a payment plan and avoid having your debt go to medical collections, it’s sometimes impossible to avoid. The unfortunate truth is that nearly 20% of American have unpaid medical debt. So what can you do once it’s there? You have a couple different options.

If you can pay the bill, you might be able to convince the collection agency to remove the item completely from the credit bureaus. They are not obligated to do this, but it’s worth asking. In the event you were never notified about the amount owed, or otherwise feel you were wrongfully charged, you can contact the original care provider and ask them to remove your account from collections and pay them directly. If that doesn’t work, file a complaint to the Consumer Financial Protection Bureau.

When disputing errors on your credit report, whether they’re medical related or not, it’s important to document every step you take. Make copies of everything: your bills, receipts, and letters to and from the medical provider or debt collector. If you reach an agreement on the phone, ask the other party to send confirmation in writing so that you have a record of the arrangement.

In the event your credit report indicates that a paid medical bill is still unpaid, you dispute the account with the credit bureaus directly. Just remember that you have to repeat the process with each credit bureau that has the medical collection on your credit report. The credit bureaus are required to follow up with you within 30 days of receiving your complaint, so mark your calendar to make sure they do.

When you’re dealing with large amounts of medical debt, try your hardest to avoid it going to collections and showing up on your credit report. Ask your medical provider for assistance in coming up with a payment plan that works for both of you. Never be afraid to negotiate and make sure no one has made any errors along the way with your account. This holds true even if you medical debt does appear on your credit report.

Check that the delinquency date and payment status are accurate because it’s all too easy for someone to have made a clerical error at some point. You certainly can recover from excessive amounts of medical debt. While it takes a good deal of time and persistence, your diligence can often result in medical bills staying far away from your credit report.