Does medical debt affect credit score?

 Posted on October 04, 2021 in Medical Debt and Bankruptcy

Even if you have a good health care plan, a trip to the emergency room may set you back hundreds or thousands of dollars. If you must stay in the hospital or undergo a surgical procedure, you may spend considerably more. When the medical bills arrive, you simply may not have the means to pay immediately.

While your credit score should be lower on your priority list than your health, you may wonder how unpaid medical debt may affect your personal creditworthiness. In this regard, there is some good news and some not-so-good news.

The good news

If you can stay on top of your medical bills, even considerable medical debt is not likely to affect your credit score. That is, medical debt usually matters only when it goes to collections. Therefore, if you are not yet behind on your payments, it may be advisable to negotiate a repayment plan with your health care providers.

The not-so-good news

There are a couple of ways unpaid medical debt can be catastrophic for credit scores. First, if you miss payments, your provider may pass your debt through to a collection agency. This is likely to trigger an immediate decline in your credit score. Additionally, your doctor or hospital may be unwilling to negotiate your bill or accept a payment plan.

Even though diagnoses and treatment of major medical conditions can be almost unbelievably expensive, maintaining your good health is probably worth going into debt. Ultimately, though, if you find your credit score is dropping due to unpaid medical debt, it may be time to explore your debt relief options.