Medical bills are sometimes unavoidable. With the cost of medical care steadily rising and insurance companies including many procedures, conditions and medications on the list of things they won’t cover, consumers sometimes find that things like a heart attack or an accident lead to an influx of overwhelming medical costs.
Unfortunately, there isn’t too much you can do about medical debt that isn’t going to impact your credit score. Paying the bills might not be possible because most people don’t have limitless savings account holdings that they can draw from. Sometimes, medical centers will allow you to make payments on the bills, but even that might be difficult if you are on a tight budget.
When you can’t afford the medical bills, you have two options: Ignore the bill or file bankruptcy. Ignoring the bill is certainly the easier of the two; however, once the doctor’s office realizes you aren’t going to pay, they will turn it over to a collection agency. This is when the bill can impact your credit. The negative entry can drop a higher score by 50 to 100 points. It will remain on your credit report for up to seven years from the date of the delinquency.
Fortunately, not all credit scoring system weigh medical debt heavily. FICO 9, which is a newer system and not widely used yet, doesn’t count medical bills as heavily as other debts. FICO 8, which is still commonly used, weighs medical bills with an initial balance of $100 or more with the same weight as other debts. Vantage Score 4.0 is another fairly common system, which counts medical collections as less serious than other debts. It doesn’t count any medical collections that are under six months old at all.
If you know that you can’t pay the medical bills, especially if you have other bills that you are struggling to pay, bankruptcy might be the option for you. This enables you to seek relief from the court for many debts. This could provide you with the fresh financial start that you need to get back on your feet.