Do Medical Bills Affect Credit Score? What to Do to Get Rid of Them

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The cost of a single illness in the UK can burn a big hole in your pocket. Much as you try all the harder to have a balanced diet, you are likely to fall prey to diseases. The cost of medical care in the UK is very high and it is soaring slowly and surely, tying up people with medical debt. Excessive medical debt continues to eat up your savings account leaving you almost strapped for future emergencies.

If you do not reimburse the debt on time, you will end up with a lawsuit. A report published last month revealed that over 2400 lawsuits have been filed against patients with medical debts. Lawsuits and reliance on debt collection agencies have been increasing day by day.

Any unpaid debt will affect your credit score because a lender will go through your credit file to see how many loans you own at a particular time and track your payment history. Even if you apply for a short term loan with bad credit, the lender will likely run a credit check. Your credit score will be determined on basis of information recorded in your credit report.

Payment history is the most important factor because it amounts to 35% of your credit score, but there is always an ambiguity in case of medical debt. An unpaid medical debt will likely not show up on your credit report because doctors do not directly report it to credit bureaus.

Just because health care providers are not reporting your unpaid bills to credit reference agencies, it does not mean that you can beat the rap. They can seek help from debt collection agencies to deal with your outstanding balance. You must remember that a large amount of outstanding medical debt will end up with a lawsuit. Here is what you should do when you are under the burden of medical debt.

Bad Credit Loans with no Guarantor is a good Option

The fact is you cannot escape paying medical debts. It means you must have enough money to pay it back. Bad credit loans with no guarantor can help you borrow money provided the lender runs a soft credit check. While taking out a loan to fund medical bills, make sure that you have a repayment plan. Otherwise, your credit score will immediately plummet and the lender will appoint a debt collection agency to receive money from you.  

Ask the doctor’s surgery to set up for payment arrangements

Nothing is better than having an emergency cushion to pay off the whole of the medical bills. You can save your money in interest paid on top of the loan amount. If you can make partial repayment, call the doctor’s office to set up payment arrangements before they transfer you to a debt collection agency. Once you are medically billed, make sure that the doctor’s surgery contacts your insurance company in case the service is covered. Contact your insurance company if they do not pay it.

File Bankruptcy

This option is the last resort. When you file for bankruptcy, all your debts are divided into different categories. Certain debts cannot be eliminated even if you file for bankruptcy but fortunately, they are not medical debts.  You will have to talk to your attorney how you can file for it. You will have to figure out whether you qualify for the bankruptcy chapter or not.

The Bottom Line

Medical bills generally do not affect your credit score as they do not show up on your report, but they bring financial obligation. The rule of thumb says that you should have an emergency cushion to fund your medical expenses. You will likely face cash shortfall despite savings, but then short-term loans can tide you over.

About Author

about author

Adrina Martinez

Adrina Martinez is a financial adviser at Personal Loan Lender. She has an experience of almost 6 years in the finance industry. With her excellent efforts, the company has been able to provide myriad of borrowers with financial assistance. Her incredible role is to explain various options to borrowers depending on their credit history and income statement, which has benefited both borrowers and Personal Loan lender. With genuine guidance, borrowers get personalised deals without any risk of falling in debt and the lender gets money back timely without chasing borrowers.