If you’re worried about paying for a health care need, you’re not alone: About one in five Americans are facing past-due bills for emergency healthcare needs. But do medical bills affect your credit and your financial future?

Medical debt in itself usually does not affect your credit scores. Your health care bills aren’t reported to the major credit bureaus by your doctor—even if you’re a few days late with a payment. But what if you go beyond that? In that case, the hospital or medical provider may turn it over to a collection agency, who then might report it to the credit bureau. And that’s when things get complicated.

Here is what you need to know:

Do Medical Bills Affect Your Credit?

Sometimes they can if the unpaid medical bills end up on your credit report. Here’s how it works: When you take out a new auto loan, for example, the lender will usually report the loan to the credit bureau within about 30 days, and it will then show up on your credit report along with information about whether or not you’re making on-time payments.

Medical bills on credit reports work differently. Medical debt typically shows up on your credit report only if it’s past due and is in collection, where the hospital or medical provider hires a third-party agency to collect the amount due. An account in collection is a significantly negative record on your credit report.


When Do Unpaid Medical Bills Show up on Your Credit Report?

Your hospital or health provider can send unpaid balances to collections whenever they want; however, major credit reporting bureaus have agreed to wait until a medical debt is delinquent by at least 180 days before including it on your credit report. The waiting period is intended to provide you with extra time to resolve errors or negotiate with your insurance company.


How Long do Unpaid Medical Bills Stay on Your Credit Report?

If you pay off a medical debt that has been sent to collections your report will be updated to reflect the “paid” status and some agencies remove paid collections from their reporting.  However, the record that you had an account in collection could stay on your credit report for up to seven years. Conversely, if you don’t pay off a medical bill that has gone to collections, that negative record will also drop off your credit report after seven years.

Nevertheless, there’s still an incentive to pay off the debt, even though both paid and unpaid collection accounts are subject to the seven-year recording period. That’s because future lenders are likely to view a paid collection account more favorably than an unpaid collection account.


How to Keep Medical Bills Off Your Credit Report

The easiest way to keep medical bills off your credit report is to make regular payments. If you can’t pay them back all at once, most hospitals or medical providers will work with you on a payment plan so you can make payment installments on a timeline that works for you. Since most medical bills don’t affect credit unless they go to collections, having conversations with the billers and working towards repayment is your best option.


Prevent Medical Bills From Hurting Your Credit Score

If you’re unable to pay your medical bills, there are several ways to get help, including government programs and financial aid from the hospital.

You can also consider a personal installment loan. With an installment loan, you can borrow a lump sum to wipe out your medical debts. You’ll pay back the borrowed amount plus a fixed interest rate with regular payments (or installments) over a fixed period of time. Making regular payments on an installment loan can boost your credit profile. Personal installment loans are available from banks, credit unions, and also online.

However, keep in mind, if you do not make your personal loan payments on time, those late payments will appear on your credit report, potentially dragging down your credit score.

With rising health care costs, paying for medical debt isn’t always easy. If you find yourself struggling to keep up, contact your health care provider’s office first to try to work out a payment plan. Remember, as long as you’re paying on the debt, those bills usually won’t impact your credit report or credit score.

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