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How will my credit be affected by medical debt?

Medical debt might show up on your record with credit reporting agencies, and this can cause your credit score to be lowered. However, credit rating agencies realize that a lot of people have medical debt right now and it's a big and unavoidable problem for our nation. The agencies also realize that some people just cannot help but incur medical debt because of unplanned life circumstances. As such, they do not unfairly penalize people for this kind of debt.

Here's one reason why medical debt is not viewed the same way as other types of debt. Sometimes a patient with a lot of credit worthiness might have a very expensive medical procedure performed, but the insurance company will drag its feet at paying the bill. That debt could stay on the consumer's record until the bill is paid, and thereby unfairly affect the patient's credit rating.

What all this boils down to is this: Having a lot of medical debt is not as bad for your credit rating as it is to have a lot of credit card debt. Therefore, if you have an outstanding medical bill, it is important to first focus on other categories of debt before you pay that off.

Also, according to FICO, medical debts that get paid off will not affect its latest version of its credit rating system, called FICO 9. Another credit reporting agency, VantageScore 3 will also ignore all collection accounts that have been paid in full. Furthermore, Equifax, TransUnion and Experian made an announcement early last year that they would not investigate unpaid medical bills in the same way that they used to. Furthermore, they would give consumers 180 days before putting them on their credit reports.

Ultimately, if you have a lot of medical debt, you may want to discuss your debt situation with a qualified Ohio bankruptcy attorney. Just knowing the way this debt is affecting you and what strategies are available for resolving the debt can bring enormous peace of mind.

Source:, "How to Deal With a Medical Debt Collector," Feb. 19, 2016

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