Debra Booher & Associates Co., LPA Click here to get your free Legal evaluation
Call Us Today Toll Free 888-542-1300

Protect credit from damage from medical bills

LIKE | SHARE | TWEET COMMENT FOLLOW

Medical bills are a reality of life for many people in Ohio, but if they are paid on time, they may not become a recurring problem. However, a medical bill that goes into collections may wreak havoc on a credit score. A study by the Consumer Financial Protection Bureau found that medical bills tend to hurt a consumer's credit reports more than they should. The study suggests that those whose credit scores were negatively affected by unpaid medical bills paid other financial obligations in a way that was comparable to those whose credit ratings were 10 points higher. Thus, the CFPB determined that a person's failure to pay a medical bill on time did not equate to an increased likelihood of missing other payments.

Credit bureaus have taken note of the problem and are planning more nuanced means of scoring in the future. FICO has noted that its current algorithm does not take into account "small collections amounts" though it did not specify what monetary value was considered "small." FICO also stated that its new method of calculating credit scores will better reflect nuances in collections data.

However, consumers should still be wary of the ability of accounts in collection to derail credit scores. Many companies use even older FICO methods than the current one, and medical bills that remain unpaid may do serious damage to a person's score. For those with multiple bills, it is important to track them and ensure they are paid once they are sent to insurance providers. Making sure a bill gets paid on time can protect a person from an enormous amount of trouble later on.

For those who find themselves crippled by medical debt, it may be helpful to consult with a lawyer who has experience in bankruptcy law. Declaring bankruptcy is an option for some because it provides effective relief from debt in many cases.

Source: Fox Business, "Prevent Medical Bills From Bruising Credit", Liz Weston, July 18, 2014

No Comments

Leave a comment
Comment Information
Email Us For A Response

How Can We Help?

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Cuyahoga Falls Office
1350 Portage Trail
Cuyahoga Falls, OH 44223

Toll Free: 888-542-1300
Phone: 330-253-1555
Fax: 330-253-1599
Cuyahoga Falls Law Office Map

Beachwood Office
3401 Enterprise Pkwy.
Suite 340
Beachwood, Ohio 44122

Toll Free: 888-542-1300
Map & Directions

Independence Office
4700 Rockside Rd
Suite 415
Independence, Ohio 44131

Phone: 216-447-0207
Map & Directions

Westlake Office
1991 Crocker Rd
Suite 600
Westlake, Ohio 44145

Toll Free: 888-542-1300
Map & Directions

Canton Office
4450 Belden Village Street NW
Suite 204
Canton, Ohio 44718

Phone: 330-492-9600
Map & Directions

Ravenna Office
2633 St. Rt. 59
(Orchard Plaza)
1st floor
Ravenna, Ohio 44266

Phone: 330-297-5200
Map & Directions