How To Remove Medical Collections From Your Credit Report

Medical bills can quickly accumulate, and if they go unpaid, they may eventually end up in collections. Unfortunately, when medical collections are reported to the credit bureaus, they can have a significant negative impact on your credit score. A lower credit score can make it difficult to qualify for loans, rent an apartment, or even get certain jobs. However, there are strategies you can use to remove medical collections from your credit report. In this guide, we’ll walk you through the steps you can take to address medical collections and improve your financial health.

1. Understand the Impact of Medical Collections

Before diving into the removal process, it’s important to understand how medical collections affect your credit.

Unlike other types of debt, medical bills often arise from unexpected situations, such as an emergency room visit or a sudden illness.

Because of this, credit scoring models like FICO and VantageScore treat medical debt differently than other types of collections.

For example, newer versions of the FICO score (FICO 9 and FICO 10) and VantageScore give less weight to medical collections compared to non-medical collections.

Additionally, paid medical collections have less of an impact on your score than unpaid ones. In fact, FICO 9 and VantageScore 4.0 disregard paid medical collections entirely.

Despite these changes, unpaid medical collections can still lower your credit score, especially if you’re using an older scoring model, such as FICO 8, which many lenders still use.

This is why it’s important to address medical collections on your credit report as soon as possible.

2. Review Your Credit Report for Errors

The first step in removing medical collections from your credit report is to obtain a copy of your credit report and review it for any errors.

Under the Fair Credit Reporting Act (FCRA), you’re entitled to a free copy of your credit report from each of the three major credit bureaus—Equifax, Experian, and TransUnion—once every 12 months.

You can access your reports by visiting AnnualCreditReport.com.

When reviewing your credit report, look for any inaccuracies related to medical collections. Common errors include:

• Incorrect account balances
• Duplicate accounts
• Inaccurate dates of delinquency
• Medical bills that were paid by insurance but still appear as unpaid

If you find any errors, you have the right to dispute them with the credit bureau that is reporting the incorrect information.

3. Dispute Inaccurate Medical Collections

If you’ve identified an error on your credit report related to a medical collection, you can dispute the entry with the credit bureau.

This process can be done online, by mail, or by phone. Here’s how to dispute inaccurate medical collections:

1. Gather Documentation: Collect any documentation that supports your claim. This might include payment receipts, insurance statements, or correspondence with the medical provider.
2. Submit a Dispute: Contact the credit bureau that is reporting the incorrect information. You can submit a dispute online through their website or by sending a dispute letter along with copies of your supporting documents. In your letter, explain the error and request that the collection be removed.
3. Wait for a Response: The credit bureau is required to investigate your dispute and respond within 30 days. If the bureau finds that the information is indeed inaccurate, they will correct or remove the collection from your credit report.
4. Follow Up: After the investigation, review your credit report again to ensure that the correction has been made. If the error persists, you may need to escalate the dispute by contacting the Consumer Financial Protection Bureau (CFPB) or seeking legal assistance.

4. Negotiate a Pay-for-Delete Agreement

If the medical collection on your credit report is accurate, you may still be able to remove it by negotiating a pay-for-delete agreement with the collection agency.

A pay-for-delete agreement is a deal in which you agree to pay off the debt in exchange for the collection agency removing the account from your credit report.

To negotiate a pay-for-delete:

1. Contact the Collection Agency: Reach out to the collection agency and express your willingness to pay off the debt in exchange for them deleting the account from your credit report.
2. Get It in Writing: If the collection agency agrees to your request, ask for the agreement in writing before making any payments. This written agreement will protect you in case the agency fails to follow through on their promise.
3. Make the Payment: Once you have the agreement in writing, make the payment according to the terms. After the payment is processed, follow up with the credit bureaus to ensure that the collection has been removed.

It’s important to note that not all collection agencies will agree to a pay-for-delete arrangement.

If they refuse, paying the debt will still help, as paid medical collections have less of an impact on your credit score, especially with newer credit scoring models.

5. Verify If Your Medical Debt Qualifies for Removal Under the New Medical Debt Rules

In recent years, there have been changes in how medical debt is treated on credit reports.

As of July 2022, the three major credit bureaus—Equifax, Experian, and TransUnion—introduced new rules that provide consumers with more protection against medical debt:

• Paid Medical Collections Removed: If you’ve paid off your medical debt that was in collections, the credit bureaus will automatically remove the collection from your credit report.
• 12-Month Waiting Period: There is now a one-year waiting period before unpaid medical bills can be reported on your credit report, giving you more time to resolve the debt with your healthcare provider or insurance company.
• Under $500 Removed: Beginning in the first half of 2023, medical collection debt under $500 will no longer be included on credit reports.

If your medical debt qualifies under these new rules, the collection should be automatically removed from your credit report.

However, if it hasn’t been removed, you can contact the credit bureau and request that they delete the collection.

6. Seek Professional Help if Needed

If you’re struggling to remove medical collections from your credit report on your own, you may want to seek professional help.

Credit repair companies specialize in helping individuals remove negative items from their credit reports, including medical collections.

Be sure to choose a reputable company with a strong track record and transparent fees.

Alternatively, you can consult with a credit counselor, who can help you create a plan to address your debt and improve your credit score over time.

Non-profit credit counseling agencies often offer these services at a low cost or for free.

Conclusion

Removing medical collections from your credit report can be a challenging process, but it’s not impossible. By reviewing your credit report for errors, disputing inaccuracies, negotiating with collection agencies, and taking advantage of new medical debt rules, you can improve your credit and regain control of your financial future. With persistence and the right strategy, you can remove medical collections and work towards a healthier credit score.

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