As If We Don’t Have Enough to Worry About

I read today that over 45 percent of Americans have at least one medical collection on their credit report.  Even though the lenders say they don’t hold that against you, the truth is medical collections can affect your credit score to such an extent that you are unable to qualify for the loan you’ve applied for.

Medical collections really are different from other types of debt for several reasons.  First, often the patient never received the bill.  And even if the bill is sent, if it’s from a hospital it probably is incorrect.  Between the hospital and the insurance company, bills are held up, lost, or sent to the wrong people for a treatment they never received.  My next door neighbor received a bill for an implanted  heart monitor.  He doesn’t have a heart monitor.  And my daughter received a bill 12 years after she divorced, for treatment given her husband’s new wife. 

It can seem humorous talking about it like this, but it can affect your credit score by 100 points or more.  It’s wise to check your credit once each year.  You are entitled to a free credit report from each bureau every 12 months.  Go to www.annualcreditreport.com to get your free copies.  It’s a good idea to be proactive because when you need your credit, you usually don’t have time to get it corrected.  It’s always better to keep an eye on it and clean it up whenever you find an error. 

Your credit score is going to be even more important in the following months.  Whoever has good credit and cash in the bank will be able to write their own ticket.  These days, you’re a dying breed.