I’m currently dealing with about $20k in medical debt from psychiatric holds, and unfortunately, most of it won’t be covered by insurance.
My parents keep telling me that medical debt won’t affect my credit score. They said I can either pay whatever I want each month to avoid collections or just not pay at all, and it wouldn’t impact my credit.
I’m really confused and want to know if this is true. Does medical debt actually affect your credit score? What happens if I don’t pay, or only make small payments?
I’ve had medical debt from an ER visit, about $500, just disappear completely. But I’ve also been sent to collections by LabCorp for just $12… so, in my experience, it’s really hit or miss 
Depending on the amount and collecting agency. A dubious company purchased a medical collection I owned years ago. Rather than taking one lump sum, they divided it over ten distinct collecting items and applied the credit all at once. Each piece cost roughly $400. After a few months, it eventually disappeared after I lodged a complaint against the provider’s medical license.
Not exactly.
Currently, medical debts under $500 don’t show up on credit reports. Debts over that amount can appear, especially if they are sold to a debt collector.
Most medical providers don’t report directly to credit bureaus. Even if you’re behind on payments, as long as the debt stays with the provider, it usually won’t be reported. However, if you don’t pay a bill for over 90 days, the provider might send or sell it to a collections agency. If the debt is over $500, the collector can report it to credit bureaus after one year, and it can stay on your credit report for up to seven years.
The Biden Administration has proposed new rules to prevent medical debt from affecting credit scores, but as of August 24, 2024, these are still just proposals. The current rules still apply.
Since most unpaid medical debts end up with collectors, you could still be pursued or sued if you don’t pay. However, with the potential for new rules, collectors might be more open to negotiating a debt settlement if you can offer a lump sum payment.
If my memory serves me correctly, if it goes into collections or is not paid, it will have an impact on credit score because it is over $500.but if my memory serves me well, that is.
If I’m mistaken, I’m sure someone will correct me.
Not totally. that is accurate, so long as the provider retains the debt; but, this will not last indefinitely. It is mostly governed by state legislation. They aggressively seek judgments and begin pursuing paychecks in my state. Some states are less aggressive than others because they have different particular protections regarding medical debt and collections. It will depend on when they have to file a lawsuit to defend their debt-related rights.
Even while in collections, medical debt under a specific amount is invisible.
Sure, after it’s in collections, it will harm your credit score if they have your social security number and send it to collections. It will then begin to show up on your credit record.
not American.
Not in my nation, unless you are unable to make payments on time or in full and end up in default.
Sure, once the hospital sells your debt to a collection agency.
It’s going to show up.
In the US, a non-profit company buys medical debt and settles it on behalf of patients. I can’t remember the organization’s name.