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Medical debt can disproportionately affect your credit score

Lets say that, for years and years, you are perfectly healthy. You work hard and play hard, but you also make sure that your health doesn't suffer as a result. One day, you get a sudden pain in your stomach that pops up every once and awhile. Then it starts becoming more frequent, followed by the pain increasing to the point where you know you can't put off a doctor's visit much longer.

Finally, you give in -- and though the diagnosis isn't as bad as you thought, it's still not pretty. You need surgery, you'll need some rehab and prescription drugs, and there will be a bevy of tests along the way. All of this stuff costs a pretty penny, and you're not sure how you're going to afford it.

This happens to people everyday in this country. Maybe not these exact circumstances, but something similar to it -- and the medical debt associated with this story can hurt just as much as the pain associated with the person's medical condition.

Unpaid medical debt, it turns out, hurts your credit score than many common forms of debt. Your cellphone bill, your car insurance, your grocery bill for a month -- all of these things, when left unpaid, hurt your credit score less than unpaid medical debt according to a new study. Considering the complex nature of medical bills, this seems a bit harsh.

Bankruptcy will hurt your credit score too, but it can help you clear out that medical debt -- which can often be so immense that the individual has no realistic way of paying it off.

Source: CNBC, "Credit alert! Unpaid medical bills unfairly hurt scores," Herb Weisbaum, May 21, 2014

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