The added stress that unpaid medical debt adds to one's health is substantial. On top of an individual worrying about their health concerns, they also must consider how they will pay their medical expenses. When expenses are left unpaid, the negative effects of the outstanding charges on their credit score only adds to the burden.
Diagnosing the Issue
Outstanding medical debt accounts for $88 billion in the United States. Over 90% of the population has health insurance. Yet, one in five Americans have bills that are currently in medical collections.
The majority of reported collections are a result of unpaid bills rather than unpaid loans. Unpaid bills include, utilities, credit cards, medical expenses, cellphone and internet bills, etc. More than half of the unpaid bills sent to collection agencies are unpaid medical bills.
Credit bureaus are responsible for consumer credit reporting. The three major reporting agencies are Equifax, Experian, and TransUnion. These credit reporting companies each have tools and measures which affects your credit score.
Learn more about what affects your credit, the most popular credit score- FICO, and how to increase your score.
Treatment Plan
The Consumer Financial Protection Bureau (CFPB), a US government agency, has many resources for those facing medical debt. They encourage individuals to:
- Review their statements carefully
- Investigate financial assistance
- Dispute inaccurate credit reports
- Know the rules debt collectors must respect when attempting to collect
Congress has also stepped in to help Americans with medical debt.
The No Surprises Act is a helpful bill that serves as a support for individuals facing surprise medical bills. The act is applicable to anyone with medical bills, especially those which are delinquent. Learn more about the No Surprises Act.
As of April 2023, all paid medical debt should be removed from your credit report. As well as, debt that is less than a year old and debts of $500 or less. This means:
- If a debt as been paid it cannot be listed on your credit report
- New debts cannot be listed on your credit report until after one year
- Debts less than $500 have no business on your credit report
Approximately half of those with medical debt on their credit reports will benefit from these new guidelines. The debt will be removed from their credit history. Consequently, raising their credit score.
A higher credit score means better housing options, low-interest rates, more service options, and loan qualifications.
Course of Action
First, we will review how to handle disputes on your credit report. Begin by reviewing your report and highlighting any discrepancies. Specifically, any paid medical collections, debts less than a year old, or any less than $500. The No Surprises Act can be cited for their removal.
Other discrepancies may include incorrect charges or inaccurate information. After you've noted all discrepancies, you then need to collect any supporting documents that are relevant.
Now, it's time to write your dispute letter. Using the information you've gathered, begin by providing your personal contact and identification information. Then, cite the discrepancies on your report and reference the attached documents that support your claim. Lastly, request that the errors be removed.
Follow the template below as a guide when writing your letter.
For medical expenses that are not avoidable, there are still actions you can take to ensure validity.
To begin correcting your medical debt, contact the billing agents and request itemized bills of service. Review the statements to be sure that each listed charge is a service that was rendered. Confirm that the bill has been processed through your insurance correctly. If you suspect an issue, you can contact your insurance company directly.
Once you've confirmed the charges are correct, you can set up a payment plan to tackle the charges.
Sending Your Dispute Letter
Once your dispute letter is ready to mail it should be addressed and sent via Certified Mail®. Learn how to properly write and address a letter.
The importance of Certified Mail when working to dispute medical debt is crucial. Multiple government agencies, including the Federal Trade Commission and CFPB, instruct those disputing credit report errors to send correspondence via Certified Mail.
Certified Mail Labels provides proof of mailing, USPS tracking, Electronic Delivery Confirmation, and Return Receipt Signature. Our 10-year, compliance data archive provides excellent record-keeping while securely organizing your documents.
| Credit Bureau Contacts | ||||
|---|---|---|---|---|
| Contact Number: | Address To: | Mail To: | Dispute Info: | |
| Equifax | (866) 349-5191 | Equifax Information Services LLC | P.O. Box 740256 Atlanta, GA 30348 |
Dispute Request Form |
| Experian | (888) 397-3742 | Experian | P.O. Box 4500 Allen, TX 75013 |
Dispute Online |
| TransUnion | (800) 916-8800 | TransUnion LLC Consumer Dispute Center |
P.O. Box 2000 Chester, PA 19016 |
Dispute Online |
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Sample Credit Report Dispute Letter
Your Full Name
Personal Identification Information Required by Credit Bureau (Ex: Birthday, Report Confirmation Number, Etc.)
Street Address
City, ST ZIP Code
Date
Credit Bureau/Company Name
Street Address
City, ST ZIP Code
To Whom It May Concern:
While recently reviewing my credit report I noticed discrepancies that I wish to dispute.
Dispute 1: [List information that supports your dispute. Ex: Date, Source (who reported this information to the credit reporting company), Account/Identification Numbers, Explanation, and Reason for Disputing]
Dispute 2: [Insert applicable information for this dispute, as you did above. Continue until all disputes have been listed in as much detail as possible.]
Attached you will find a copy of my credit report. I have noted on the report the items that I am disputing.
Please investigate the disputed errors. and rectify the above matters as soon as possible.
Sincerely,
Your Name
Contact Number
Email Address
Attachments: [LIST ATTACHED DOCUMENTS]
Additional Resources
Repairing Your Credit One Certified Letter at a Time
How to Properly Write, Address a Letter and Must Know Mail Regulations
