Hey everyone, in today's video we want to discuss how unpaid medical bills can damage your credit and stick around causing problems for years. But first, the good news - recent policy changes are giving some relief by removing certain medical debts from credit reports.
Now, historically, unpaid medical bills could slash your credit score since collections agencies report these to credit bureaus. That dark mark on your credit then messes with your ability to get loans or secure good interest rates for years.
And medical providers had incentives to be aggressive in sending bills to collections because it put pressure on patients to pay. Now new rules stop unpaid medical bills under $500 from ever hitting your credit. This will help a ton of folks!
For larger debts though, it's still vital to stay on top of payments before things spiral out of control. Try checking carefully for billing errors first and negotiate with the hospital if charges seem outrageous. Ask about financial assistance programs too - these exist to help!
If collections calls start rolling in, act quickly! Work out a reasonable payment plan or settlement offer before they report you and trash your credit. Understand agreements to pay monthly are contracts and your credit can still suffer if you default.
Now even if unpaid medical bills already did their damage, take heart - negative items fall off your credit report after 7 years. Until then, focus on responsible money management - pay all bills on time, lower credit card balances, and dispute any mistakes with the credit bureaus.
We hope this overview gives some relief knowing medical debt won't always drag your credit score down forever thanks to new protections. Let us know in the comments other financial and legal topics you want our advice on!
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