How to Dispute Inaccurate Medical Collections on Your Credit Report

How to Dispute Inaccurate Medical Collections on Your Credit Report article image.

If you've received a costly medical bill that you forgot about or never paid, you may end up with a medical collection account on your credit report. Unfortunately, these types of collection accounts can hurt your credit scores and make it more expensive for you to secure new credit down the road.

So, is it possible to remove medical collections from your credit report? While it is possible in certain circumstances, accurately reported items will remain on your credit report for seven years from the first date the account became late.

How Medical Collections Affect Your Credit Score

FICO 9, the most recent FICO credit scoring model, as well as the VantageScore® 3.0 and 4.0 credit scoring models, don't weigh medical collections as heavily as other collections. Additionally, if your insurer pays off your medical bill that went to collections, the three major credit bureaus (Experian, TransUnion and Equifax) will remove the collection account from your credit history if they have proof or verification from the collection agency.

Although this may seem like great news, there is one important issue to consider. Different lenders use different credit scoring models—and not all of them use the most recent versions—so you may not know which scoring model is being used when you apply for a mortgage, car loan or any other type of financing. Therefore, you won't have a way of knowing how much weight your medical collection account will carry when a lender is evaluating your creditworthiness.

Keep in mind that general medical debt will never appear on your credit report; only debt that is in collections will appear. The collection account on your credit report will show the original creditor's name and available contact information for the collection agency (not the name of the medical office or provider).

Because medical collections can have a significant negative impact on your credit scores, try to keep your medical bills from ever going to collections in the first place. But if they do end up on your credit report, here's how you can deal with them.

When Do Medical Collections Appear on a Credit Report?

Not every medical collection will be included on your credit report. The three major credit bureaus wait 180 days before adding medical collections to your credit history. The purpose of this six-month grace period is to give you a sufficient amount of time to resolve any errors on your bill, pay your bill, design a payment plan or consult your insurance company so they can take care of it.

If you take action within the 180-day period, you can avoid medical bills from taking a toll on your credit scores. On the other hand, if your collection is 180 days old and unpaid, it may be added to your personal credit file and could stay on there for seven years.

Is It Possible to Remove Medical Collections From Your Credit Report?

Accurately reported collections cannot be removed from your credit report. However, medical collections can be inaccurate, and if you believe your medical collections were reported inaccurately to the credit bureaus, you can dispute them with each credit bureau and may be able to get them removed or updated based on verification from the collection agency.

How to Dispute Medical Collections

While TransUnion and Equifax have their own processes for disputing credit reports, Experian allows you to do it online, via phone or by mail. The most convenient and efficient way to dispute inaccurate medical collections on your Experian credit report is online through Experian's Dispute Center.

When you dispute the inaccurate collection account, you may be asked which detail on the account you believe is inaccurate, and why you suspect it is inaccurate. If you've paid the bill, payment records from your medical provider and copies of your check or credit card statements are supporting evidence that could be beneficial to your dispute.

After you submit your dispute online, you'll receive alerts from Experian anytime there is a status update. Once completed, your dispute will have one of the following three outcomes:

  • Your medical collection will be corrected.
  • Your medical collection will be deleted.
  • Your medical collection will remain on your credit report as is if it is verified as accurate.

How to Prevent Medical Collections on Your Credit Report

It may be easier to prevent medical bills from going to collections and hurting your credit scores than dealing with them when they're already there. Here are some tips to help you do that.

  • Understand your health insurance plan. Take the time to learn the ins and outs of your health insurance plan. By understanding exactly what it does and does not cover as well as what copays you may owe, you'll be less likely to make costly mistakes that lead to medical collections.
  • Set up a payment plan. If you don't have the cash to pay for a medical bill upfront, work with your medical provider to design a payment plan that aligns well with your budget. This way you can pay it off through fixed monthly payments instead of one lump sum. If you go this route, find out if you'll have to pay any interest or additional fees so that you don't face any unwanted financial surprises.
  • Consider getting a medical credit card. Medical providers that don't accept payment plans may be open to medical credit cards. Since these cards usually come with a six- to 12-month interest-free period, it may be a good option if you feel confident that you can pay off your medical bill in that time period.
  • Find out if you qualify for an income-driven hardship plan. If you're on Medicaid, you may be eligible for an income-driven hardship plan. With this plan, you can reduce the amount you owe and qualify for a payment plan with smaller monthly payments than those of a traditional payment plan.
  • Pay attention to your credit report: Get into the habit of checking your credit report on a regular basis.

While medical treatment is essential, it can have a negative effect on your credit scores if you're left with a bill you can't pay. The good news is that there are steps you can take to ensure the medical care you receive doesn't ding your credit scores and hinder your finances.

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Personal credit report disputes cannot be submitted through Ask Experian. To dispute information in your personal credit report, simply follow the instructions provided with it. Your personal credit report includes appropriate contact information including a website address, toll-free telephone number and mailing address.

To submit a dispute online visit Experian's Dispute Center. If you have a current copy of your personal credit report, simply enter the report number where indicated, and follow the instructions provided. If you do not have a current personal report, Experian will provide a free copy when you submit the information requested. Additionally, you may obtain a free copy of your report once a week through April 2022 at AnnualCreditReport.