Ways to remove medical collections from your credit reports

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In a Nutshell

Medical collections can have a substantial negative impact on your credit scores, but there are ways to get them removed from your credit reports — especially if they appear in error.

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Medical collection accounts can be a pain to remove from your credit reports. To understand how to get rid of them, it helps to know how they got there in the first place.

Let’s start by defining what a collection account actually is. A collection typically results from a debt that hasn’t been paid on time. This doesn’t mean an account will go into collections the day after you miss your first payment. Usually, an account goes into collections after 90 to 180 days of non-payment. At that point, the original company owed may write off your debt as a loss and sell it to a debt collection agency — thus turning it into a collection account.

A medical collection specifically refers to a medical bill you may have forgotten about or neglected to pay. An unpaid medical collection account will likely have a negative impact on your credit scores, but that doesn’t necessarily mean you’re out of luck.

In this article, we’ll go over steps you can take to help remove medical collections from your credit reports. Here’s a basic outline of the steps:

If you’re wondering how to remove medical collections from your credit reports, you may already be aware of the damage these types of accounts can wreak on your credit. Medical collections can have a substantial negative impact on your credit scores, as payment history is generally considered a high-impact credit factor.

The good news is, you may have options for dealing with a medical collection account on your credit reports. Oftentimes, you can work with the three major consumer credit bureaus — Equifax, TranUnion and Experian — to correct information that is inaccurate.

How to dispute errors on your TransUnion credit report with Credit Karma’s Direct Dispute™ feature

If the medical collections account is accurate, however, it can remain on your credit reports for up to seven years, plus 180 days from the date the account first became past due. The negative impact to your scores typically decreases over time until the account drops off or is removed from your reports.

“Most credit scoring models give negative items less weight as they age,” says Alexander Lowry, a professor of finance at Gordon College. “In other words, the credit damage of a delinquent medical bill can lessen over time — and disappear altogether after seven years.”

That may sound like cold comfort in the meantime. One thing to understand, though, is that medical collection accounts may not always be looked at in the same light as other collection accounts.

How medical collection accounts differ from other types of collection accounts

Until recently, there wasn’t a significant distinction between medical collection accounts and other types of collection accounts — at least in terms of their impact on your credit. But newer credit scoring models such as VantageScore 4.0 and FICO® Score 9 deemphasize the impact of unpaid medical collection accounts on consumer credit scores.

To give you some more context, here’s how four of the most widely used scoring models weigh the impact of collection accounts, including medical collection accounts. As you’ll see, the newer models — VantageScore 4.0 and FICO® Score 9 — tend to reduce the impact of medical collection accounts.

VantageScore 3.0 VantageScore 4.0 FICO Score 8 FICO Score 9
Ignores paid collection accounts

Ignores medical collection accounts that are less than 6 months old

Weighs unpaid medical collection accounts less heavily than other types of collection accounts

Ignores small-dollar “nuisance” accounts that had an original balance of less than $100

Treats medical collection accounts, including those with a zero balance, like other collection accounts

Ignores paid collection accounts

Weighs unpaid medical collections less heavily than other types of collection accounts

You may have noticed a slight increase in your credit scores lately. That could have something to do with the National Consumer Assistance Plan (NCAP), which is a result of discussions and an agreement between the three major consumer credit bureaus and 31 state attorneys general reached in 2015.

Aside from the recent removal of tax liens and civil judgments from consumers’ credit reports, other credit report changes affect medical collection accounts.

Specifically, the NCAP prohibits adding medical debt to credit reports until after 180 days from the time the account was reported to the credit reporting agency. It also mandates the removal of previously reported medical collections that have been or are being paid by insurance.

To recap: Medical collection accounts may have a different impact on your credit than collection accounts associated with credit cards and auto loans. But even if they may not be as damaging, you should think twice before ignoring them.

Ways to remove medical collections from credit reports

Below, we’ve listed ways to help remove medical collections from credit reports. Since any medical collection accounts listed on your reports may be accurate or inaccurate, we’ve consolidated our suggestions for dealing with both types of accounts.

Gather your information and check for mistakes

The first step is to gather all of the information on the medical collection account as it appears on your credit reports. You’ll want to cross-reference these details with the original medical bill if you can find it.

“It’s always important to determine the amount you allegedly owe and the medical care you are being asked to pay for,” says Donald Peterson, an attorney who represents consumers against debt collectors who may be in violation of the Fair Debt Collection Practices Act.

“Billing and coding mistakes occur,” Peterson says. “If you had insurance coverage in place and provided it to the healthcare provider but they screwed up the billing, point that out.”

Ask for proof of the debt

If you’ve been contacted by a debt collector about a medical collection account, know that you have a right to proof of the debt.

The FDCPA gives consumers the right to have the following information in writing within five days of the initial communication from the debt collector:

  • The amount of the debt.
  • The name of the creditor to whom the debt is owed (more on this in the next section).
  • A statement that, unless the consumer disputes the validity of the debt, or any portion thereof, within 30 days after receiving the notice, the debt will be assumed to be valid by the debt collector.
  • A statement that, if the consumer notifies the debt collector in writing within the 30-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer. The debt collector must mail a copy of this verification or judgment to the consumer.
  • A statement that, upon the consumer’s written request within the 30-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

If you’ve been contacted about a debt you don’t believe you owe, it’s generally a good idea to secure proof before taking any next steps.

In some cases — if you’ve already paid off the debt in question or if you’ve been mixed up with someone else, for example — the debt collector may not be able to validate the debt. This could make removing the medical collection account from your credit reports much easier.

In some cases — if you’ve already paid off the debt in question or if you’ve been mixed up with someone else, for example — the debt collector may not be able to validate the debt. This could make removing the medical collection account from your credit reports much easier.

File a dispute with the credit bureaus to remove inaccurate information

Once you’ve gathered your information and asked for proof of the debt, you’re ready to file a dispute with the credit agencies. (Only do this, of course, if the medical collection account listed is actually inaccurate.)

Formal disputes must be filed individually with each credit bureau and can usually be done online through each credit bureau’s website. Credit Karma’s Direct Dispute™ feature can help you dispute errors on your TransUnion® credit report. We can also help you file a dispute with Equifax directly if you see an error on your Equifax® credit report.

Beyond providing your full name and Social Security number, the credit bureaus may ask you to provide additional details such as:

  • A copy of the medical bill in dispute
  • Specific details of the inaccurate item lines on your credit reports
  • Reasons why you believe the items are inaccurate, with supporting evidence (e.g. proof of payment)

If you actually did pay the debt but the account is still listed on your credit reports, you’ll likely want to include documentation related to the payment as well. Payment records from your hospital or doctor’s office could be helpful here. If you paid by check or card, bank or credit card statements may also serve as proof.

Each credit bureau has its own process and document requirements for filing disputes, so read the guidelines carefully to avoid excluding any essential information.

Determine the age of any accurate medical collection accounts

Collection agencies may sue you to collect on your debt. They have a limited number of years (called the statute of limitations) to sue you. So, you may still be liable for the debt after it falls off your credit reports.

For each medical collection account, find out exactly when the information is due to fall off your credit reports. Looking at the age of your debt can also help you determine if you still have legal liability. Even if collectors threaten you, when the statute of limitations passes they may no longer be able to sue you to collect.

If that sounds too good to be true, here’s the bad news: It’s not always as cut-and-dry as it may sound. In some states if you pay any amount on a time-barred debt (or even promise to pay a certain amount), the debt is considered “revived.” This will reset the clock on the statute of limitations. It may also mean the collector can sue you for the full amount of the debt, plus any additional interest and fees that have accrued.

If you have questions about whether you’re still liable for your debt, it can be helpful to consult with a credit counselor or legal professional.

Decide whether — and how — to pay

Remember: Medical collection accounts may affect your credit differently than other types of collection accounts.

It’s in your best interest to pay off the debt even though credit scoring models have moved toward de-emphasizing or ignoring paid collection accounts altogether.

VantageScore 4.0 and FICO® Score 9, for example, both ignore paid collection accounts. They also weigh unpaid medical collections less heavily than other types of collection accounts, but a paid medical collection account will almost certainly be better for your credit than one left unpaid. Paying off a debt generally results in a better relationship with the lender in question — and it may also look good to lenders who work with you the next time you need a loan.

So, what if you simply don’t have the money to pay off the debt? You may be able to negotiate a settlement with a debt collector, in which you can agree to pay a more realistic amount to put the debt to rest for good. It’s important to note, though, that a settlement may have different consequences for your tax liability and credit than simply paying off the original debt. The CFPB offers some helpful guidelines on debt negotiation in case you’re interested in doing some more research.

Bottom line

Medical collections are not a credit score death sentence. But that doesn’t mean you should ignore them.

If you’re seeing a medical bill in collections on your credit reports and it’s either inaccurate or not yours at all, you can dispute the account with each credit bureau and potentially get it removed.

If a medical collection account is correctly appearing on your reports, you’ll want to pay it off, as paid collection accounts will generally reflect better on your credit scores than unpaid collection accounts.

Ready to pay off your debt for good? Check out the Credit Karma Guide to Debt for more information on how to get started.