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Beating medical debt: How they affect your credit score

Medical bills can be a burden, but waiting to pay them for too long can result in them ending up on your credit report. When that happens, you're in a position where your credit can be affected by them, making it harder to rent properties, get credit cards or to get loans or other financing.

Credit card bureaus only get information about your debts if you allow them to go unpaid. When that happens, the medical provider reports your account to the credit bureau, sending it to collections. The problem with paying a bill after it's in collections is that the report itself can take years to fall off. That means that even though it's been taken care of, you could still suffer the consequences for many years to come.

There is a new version of the FICO score that will reduce the importance of medical bills on a collections history. This can help improve your credit score if, for instance, your medical bills are all you have to pay.

One thing to remember is that mistakes do happen. If you did pay a bill on time and it still went to collections, it is worth your time to collect evidence that you paid the bill, so you can have it removed from your credit report.

If you're struggling with medical bills, you do have several other options. You could pursue bankruptcy to have the bills discharged, or you might opt to work out a payment plan with the hospital. You may be able to negotiate down the expenses billed to you with the help of your attorney as well.

Source: Nerdwallet, "Medical Bills on Your Credit Report," Lindsay Konsko, accessed Nov. 25, 2016

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