Have you ever had a situation where you were uninsured or under-insured and got hit with a massive medical bill? If so, welcome to the club! There are hundreds of thousands of people that run into this problem every year with medical expenses. The problem is that typically when one does not have medical insurance or is under-insured, there is an underlying reason for that within’ their budget. Whether it be not enough income or the refusal to pay high medical premiums, this will stop you from addressing your medical bill obligations. If this is you, there are ways to take care of your medical bills without a one-time payment or letting it go to collections. We will discuss the many ways you can protect yourself from unexpected medical cost and come out of it in a good place financially. Let’s begin!
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Check Medical Bill for Accuracy
When you get a medical bill, the first thing you should do is make sure it is accurate. Check all of the work performed listed on the bill. Make sure the bill is specifically intended for you. Also if insurance was used, make sure the cost shown is accurate after insurance is applied. Lastly, this may sound like common sense, but make sure the bill is real. Yes, people are sending fake medical bills to people and they are paying them out of the fear it may drastically hurt their credit. Be sure to do your research before and and make sure the bill is accurate and reflects the actual services offered.
If it is inaccurate, then you should reach out to the hospital that you went to immediately. This needs to be addressed as soon as possible so it can be corrected before it’s too late. The last thing you want is for an unjustified charge to hit your pocketbook or even worse, land on your credit report from letting it sit too long unattended. If you did wait too long and the bill is on your credit report as a collection item, it’s not the end of the line. You can still dispute the charge if it was in fact inaccurate. Disputing the bill will force the hospital to prove those charges really do belong to you beyond a reasonable doubt. To file a dispute, visit How to start a credit dispute to learn how.
Pay Them ASAP
Try your best to your medical bills as soon as possible. While this is typically a lot of money if uninsured or under-insured, it will save you some major headaches down the line from not addressing the problems. It will also save you from even more potential fees associated with the debt. It sounds good on paper, but I’m almost certain that if you’re here, you probably let the bill go juuust a little bit past due. While this is okay and won’t hurt you yet, do no let it progress further. Take action on your medical bill that’s due ASAP and avoid having to do a lot more down the line. You will thank The Credit Dojo later.
What To Do If Medical Bill Goes To Collections
If the medical bill hist collections, there is no need to panic quite yet. While a collection item on your credit report looks bad to potential lenders, it is not the end of the world. There are still plenty of ways to address these items. You can do one of the following:
Speak directly with the Accounts Receivable Department of the hospital
if you want to avoid collections all together, this would be a good starting point. At the end of the day, all they want is money. depending on how you describe your situation to the Accounts Receivable team, they can work with you in ways you didn’t believe was possible. They will take much smaller monthly payments or even in some cases reduce the total amount owed. Try this before putting in more effort with the other methods for addressing a medical bill
Speak to the collections agency and ask for a Pay For Deletion in writing
If you plan to go this route, no matter what, MAKE SURE YOU GET THIS IN WRITING! Sorry, I had to emphasize the importance of this as in some cases, people were told one thing over the phone, but in reality had to deal with the blemish on their credit report for 7 years due to the creditor not holding up to their end of the bargain. Make sure if this type of agreement is made, it is clear in writing. A sample Pay for Deletion letter can be found in the sites download section, or by clicking HERE.
Pay, then send goodwill letter
If you do end up paying the bill in full, this is not the end of the line. You still have options to fix the situation and rid yourself of that negative mark reported by the creditor. You can send a goodwill letter to the creditor explaining your situation and how you fell behind. Typically if you have a valid enough reason, they will remove the mark from you credit report altogether seeing as the financial obligation has been satisfied
Dispute the item with the credit bureau
This is the absolute last resort that you’ll want to take when dealing with the collection agencies. If all of the above has failed and you still have this item on your credit report, dispute the item either via the mail, over the phone or through the credit bureaus online dispute forms (every credit bureau now allows you to dispute almost anything online). For more information on how to initiate a credit dispute, check out the article on How to start a credit dispute.
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Don’t Let A Medical Bill Hinder You
Don’t let a financial obligation in relation to a medical bill hurt your good financial standing (credit). Take action to ensure it is paid in a timely manner. Be sure to utilize the tactics that are listed in this article to prevent or erase any negative mark on your credit. Thank you for visiting The Credit Dojo. Look out for more articles coming soon based on real world experience and professional research. While waiting, if you need to monitor your credit, visit Credit Sesame.
If you wish to learn more about credit, then visit the following articles for more information:
Is it Advisable to Pay Off Collection Items?
The majority of consumers appear to believe that if they pay off collections, their credit scores will improve and become better. A shocking truth has emerged: this is not actually the case. Just so you’re aware, negative items can remain on your credit reports for a maximum of seven years, and your credit score will only begin to improve once the negative item has been removed.
What are Collection Accounts and How Do They Work?
Collection accounts are entries on a credit report that indicate that a debtor has fallen behind on previous obligations. Original creditors may have sold the defaulted debts to a debt buyer or may have assigned the debts to collection agencies after the default occurred. It should come as no surprise that the collector’s ultimate goal is to work on the client’s behalf in order to have the defaulted debt collected from the debtor or as much of it as possible.
The majority of the time, these collection accounts are reported to credit reporting agencies. According to the FCRA, or Fair Credit Reporting Act, these are permitted to remain on credit reports for up to seven years from the date of the initial debt’s first delinquency.
The Consequences of Paying Off Collections on Your Credit Score
The ramifications of completely paying off collection accounts will not disappear in an instant, however. You will still need to wait until the statute of limitations has expired before this information can be removed from your credit report. As previously stated, this will typically take approximately seven years. Fortunately, information from the past will have a smaller impact on your credit score.
Despite the fact that paying off collections will not improve your credit score, there are several ways in which you can take advantage of this situation:
Credit card or medical bills can result in debt collection lawsuits, which you can avoid if you take the proper steps.
As a result, you will be able to avoid paying interest fees to debt collectors. A debt collector is constantly selling and buying accounts, and he or she may continue to charge you fees and interest on the accounts that have been purchased.
In the event of a settlement or payment in full, the credit report will reflect this. When it comes to lenders, it can have a positive impact because they are likely looking beyond your credit score and instead of looking at your credit history and other factors. Comparing those who successfully repay an extremely past due account to those who never managed to do so, the former will demonstrate greater financial responsibility.
You will eventually be able to benefit from the most recent FICO Score model. Despite the fact that the FICO 9 is still in the early stages of implementation, the vast majority of lenders will eventually adopt it. Medical bills will be given less weight in this model, and paid accounts will be completely ignored when it comes to collections.
According to the law, the majority of negative credit information, such as collections, should be removed from credit reports over time. The fact remains that attempting to settle or pay off your debt as quickly as possible will be in your best interests. Not to mention the fact that, in contrast to older models, the newer models for credit scoring do not take into consideration collections with zero balances. If you don’t think you’ll be able to handle it on your own, you can always enlist the assistance of professionals who can simplify the entire process for you.
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How Bad is an Eviction and How Long Does it Stay on Your Credit?
Every time someone mentions a record during an eviction, what they are really referring to is a background check as well as your credit report and history. In general, an eviction will appear on your credit report for up to seven years.
That is correct; you read that correctly. It will be there not for 7 months, but for as long as 7 years, according to some estimates. Eviction is, therefore, a major issue in this community, and it is treated as such. Landlords, in particular, are wary of renting to tenants who have a history of evictions on their records. If you are ever evicted, this fact will follow you wherever you go for the next seven years, no matter how hard you try to forget it.
For landlords to know that you have been evicted in the past, there are two ways to find out.
If the reason for your eviction was non-payment of rent, your landlord may have forwarded this account to a collection agency, which will then appear on your credit report as a result of your actions.
When the courts were involved in your eviction, the case judgment is considered public record, and landlords who use tenant-screening services will be able to see this information if they conduct a background check on the tenant in question.
Is it possible to have an eviction removed from your credit report?
Anything that is accurate on your credit report will remain on your report for seven years. If there is ever a mistake, you will have the opportunity to contest the decision.
This error will be removed from your credit report if you can provide proof to the credit reporting agency that a mistake was made. If you were successful after being served with an eviction notice, you should provide proof of your victory to the reporting agency. There are landlords who will attempt to evict people even if they do not have a legitimate or acceptable reason to do so.
How Can You Find a Place to Rent if You Have an Eviction on Your Credit Report?
It is important to understand that just because you have an eviction on your credit report does not necessarily mean that you will be unable to rent for the next seven years. However, even though your report contains an eviction, there are still several options available to you for finding a place to live in the meantime.
Take the initiative.
Inform the property manager or landlord of your intention to evict them prior to submitting your application and explain your circumstances to them. Even if the eviction took place years ago and you have maintained a good tenant record since then, there is a chance that the landlord will rent to you again.
Look for someone who will sign on as a cosigner for you.
It is possible for you to obtain a rental unit if you have a co-signer who has good credit and can vouch for you. Your parent or another person with good credit can serve as your co-signer. If, on the other hand, a payment is not made on time, your landlord has the right to and will almost certainly ask for the money from your cosigner.
Pay in advance if possible.
A high probability of obtaining a rental unit exists if the landlord recognizes your willingness to pay the rental value in full upfront for a period of 3 to 6 months.
What’s the bottom line?
It is preferable to avoid being evicted in the first place if you want to avoid having any eviction information on your credit report.
Why did House Prices Go Up in 2020 During the Pandemic
The pandemic brought with it a lot of surprises, one of them being the rise in house prices. The US economy plummeted with millions of Americans finding themselves out of work and without food. No one would have predicted that at the time when times were hard for everyone, home prices would become overheated, mortgage rates would skyrocket, and the supply for houses would not meet the demands and consumer confidence in the housing market was reducing. The housing market was booming.
Right at the beginning of the pandemic, no one was willing to buy a house or even sell one. This was because of the uncertainties of the time brought about by Covid-19. In a span of a few months, most day-to-day activities were confined to the available properties. Houses became a key asset and prices began to rise.
The US real estate market in context
The American real estate market suffered a huge blow as a result of the 2008 financial crisis. The recession saw the prices of houses fall by a big margin and the world’s largest real estate market was affected in ways no one would have imagined. This was as a result of subprime mortgages that were given in large numbers to help as many Americans as possible to become homeowners. Homeowners found themselves mortgages that were higher than the value of their houses. By 2013, the market was showing signs of recovery. From 2018 to 2019, the market began to fall slightly.
For many Americans, owning a home is very important to them as it allows them to build up their wealth, make it easy for them to access credit, and be able to save more as they no longer have to pay rent. A large percentage of homeowners rely on mortgages to acquire homes after raising the down payment from their savings or with money from their families. It was expected that the pandemic would lead to foreclosures especially since the economy took a downward spiral at the start of the pandemic. Many people also lost their source of income and were unable to keep up with their mortgage payments.
The most expensive real estate in the USA is found in San Francisco, California. San Francisco has a booming economy fueled by the presence of tech companies like Apple, Facebook, Intel, and Tesla that have their headquarters in the nearby Silicon Valley. The city also has been at the forefront in matters progressive culture which attracts more people to relocate to it. As a result of the thriving tech economy that brings billions of dollars into the city, and rising housing demand, the city is the most expensive place to buy a house in the US. On average, the price per square foot is $1,100.
Why do house prices go up in general?
The value of a house is usually expected to depend on the demand for living in a particular area, but things like recessions and pandemics are known to have an impact that can either be positive or negative. House prices go up when the supply does not meet the demand. One of the key factors that affect the supply has to do with the regulations that restrict the number of housing units that can be built. For example in a single-family zone, it’s illegal to build townhouses or apartments, or condos on any spaces designated for single units and parking minimums must be met. This forces contractors to make provisions for parking spaces even in places where it’s unwarranted.
Some local governments allow groups of people to block developments they feel will have a negative impact on the overall value of the entire estate. These local zoning regulations are making it impossible for most Americans to move to better estates due to the shortage of housing.
Why did house prices go up during the pandemic?
The price for houses is determined by the existing demand and supply dynamics. The fewer the number of houses available, the higher the prices for the available units would be. If the number of buyers is fewer, then the house prices would be lower. The prices went up because the pandemic affected both supply and demand. A lot of people were in a rush to take advantage of the falling mortgage rates which made it easier to acquire homes at a cheaper price.
As a result of the falling mortgage rates, houses were not staying on the market for long. Among those who bought the homes were first-time homebuyers or those who were buying a second home. These put a lot of pressure on the market as were not putting another home on the market as they took one out of it. In some instances, others chose to refinance their mortgages based on the lower rates instead of acquiring a new home.
Because of the pandemic, people who had plans of listing their homes did not do so and those who had listed their homes took them off the market. As a result of the social distancing rules at the height of the pandemic, not many people were willing to show their houses.
Home developers did not anticipate a surge in the demand for housing during the pandemic. A number of them had let go of their employees and had shut down. At the same time, prices for materials like lumber also added to the construction costs alongside the scarcity of skilled workers.
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