When I went to the doctor this year for a routine blood test, I was sure the $108 bill I received in the mail a week later was a joke. My insurance covered all preventative care, including the test, so I assumed it was some kind of mix-up.It wasn’t, at least in their books. I spent months trying to work it out, and while I awaited a final call from my doctor’s billing department, I got another letter in the mail––this time from a debt collector.
Instantly, I knew my credit score was toast. As soon as third party debt collectors take over debts from medical servicers, they alert the three credit reporting bureaus. A flag like that on your credit report can stick for seven years and drag down scores up to 150 points.
I did the only thing I could think of. I bit the bullet and paid my bill in full on the lab’s website––even though I was due for a refund. But was I quick enough to save my credit?
“If the debt was just consigned to the debt collector then paying the original service provider was a good idea,” he says. “When the service provider still accepts payments it means they haven’t sold the debt outright…and early payment can sometimes circumvent the reporting. “
To be sure, I called up the debt collector, who assured me the debt hadn’t been reported yet. Then I called the lab, which verified my payment and that they would “call back” their claim against me––this is an important step, as it effectively erases the debt from collector’s records. Finally, I checked my credit report online (do it for free at annualcreditreport.com). When the collection didn’t show up, I knew I was in the clear.
I know not all bills are as puny as that one and many would be unable to front the cash in order to save their credit. In that situation, try calling your medical service to plead your case. The lab was willing to give me a 30 day extension every time I called to check on the status of my bill, and your chances of getting what you want are higher if their records show you actively keep in contact.
The key is this: Do whatever it takes to keep your debt out of collector’s hands in the first place.
“The timing of the reporting of the debt to the credit bureaus is optional, meaning it’s the collector’s option to a) report it quickly b) report it after a few months of non-payment or c) report it at all,” Ulzheimer says. “There is no law or rule that requires a debt collector report their accounts to any of the credit bureaus. It’s all voluntary.”
Now I just have to keep waiting for that refund––and find a new doctor.
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