What Happens When Medical Bills Go to Collections?

Dear Experian,

I owe a large medical bill and have been making monthly payments to the hospital, but they have recently told me that if I don't start paying a higher amount they will turn the debt over to a collection agency. What happens when a medical bill goes to collections? As long as a monthly payment is being made, can this really hurt my credit?


Dear TKL,

When a medical debt is sold to collections, the collection agency that purchased the debt may report the account to Experian. An unpaid medical collection account will almost certainly have a negative impact on your credit scores, even if you are sending in monthly payments.

Contact the Creditor as Soon as You Receive a Bill

If you are faced with a medical debt that you are unable to pay off, you should always contact the doctor or medical facility immediately to discuss your options, which it sounds like you've done.

Depending on the circumstances, some medical offices may be willing to work with you to set up a payment plan that can keep your account from being sold to collections and keep your credit history from being affected.

How Long Will a Medical Collection Be on My Credit Report?

If you are not able to come to an agreement with the recovery department and they do sell your debt to a collection agency that reports to Experian, the collection account will remain part of your credit history for seven years from the original delinquency date. The original delinquency date is the date the account first became late leading up to the collection status.

Even if you can't pay off the collection account right away, it can still be in your best interest to continue making payments. Paying off a collection account won't remove it from your credit report, but the account will be updated to show it is paid in full.

Many of the newer credit scoring models no longer include paid collection accounts in their credit score calculations. So, paying it off could end up helping your credit scores right away.

Thanks for asking,
The "Ask Experian" Team

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