How to Maintain Healthier Credit

How to Maintain Healthier Credit

So what can you do?

Before one of these bills winds up in collections, to the extent possible, try to be very proactive about your medical bills. Even if you have good health insurance, don’t assume everything will be taken care of. Review your EOBs (Explanation of Benefits) carefully and contact the provider and/or your insurance company quickly if it’s not being taken care of.

If you are contacted by a collection agency about a medical bill, ask them not to report it if you pay it right away (assuming you believe you owe the bill). Some won’t report if the bill is resolved quickly.

Again: Having a collection account updated as “paid” generally does not help your scores, unless a lender is using one of the newer credit score versions. So aim for removal of the item if possible. Some agencies will work with you, others won’t.

If you feel the situation is highly unfair — you never got a copy of the bill, for example — you can try two things. One is to file a complaint with the Consumer Financial Protection Bureau. The other is to contact the original provider and try to get them to pull it back from collections so you can pay them directly. If they do, the account will usually no longer be reported.

If you are contacted by a collection agency and you don’t believe you owe the bill, you have the right under the federal Fair Debt Collection Practices Act to ask the collection agency to validate the debt. You also have the right under the Fair Credit Reporting Act to dispute it with the credit reporting agencies reporting the account.