Updated: Jul 28
The Impact of Medical Bills on Your Credit Score When Purchasing a Home
If you're looking to buy a home, you might be wondering how medical bills could impact your credit. In this post, we'll discuss how medical bills can affect your credit score when buying a house, and what you can do to minimize the impact.
Do Medical Bills Affect Your Credit When Buying a House?
Are you considering buying a home in the near future? If so, you're probably already aware of the impact your credit score can have on your ability to secure a mortgage with favorable terms. But what about medical bills? Can they affect your credit when buying a house?
The short answer is yes. Medical bills, like any other debt, can have an impact on your credit score. According to a study by the Consumer Financial Protection Bureau, over half of all collection items on credit reports are related to medical debt. This means that if you have unpaid medical bills that have been sent to collections, it could have a negative impact on your credit score, and therefore, your ability to secure a mortgage.
How Medical Bills Affect Your Credit Score
When medical bills go unpaid, they can be sent to collections, which means that a third-party debt collector will attempt to collect the debt on behalf of the healthcare provider. This can result in the debt appearing on your credit report, which can lower your credit score.
According to FICO, the company that provides credit scores to lenders, the impact that medical bills have on your credit score depends on several factors. These include the amount of the debt, the age of the debt, and how recently the debt was sent to collections.
If you have a large amount of medical debt that has been sent to collections, it could have a significant impact on your credit score. In fact, a single collection item can lower your credit score by up to 100 points.
How to Minimize the Impact of Medical Bills on Your Credit Score
If you're concerned about how medical bills could impact your credit when buying a house, there are a few things you can do to minimize the impact:
Pay your medical bills on time - This is the best way to prevent medical bills from going to collections and appearing on your credit report.
Negotiate a payment plan - If you're unable to pay your medical bills in full, try to negotiate a payment plan with the healthcare provider. This can help you avoid having the debt sent to collections.
Dispute errors on your credit report - If you believe that there are errors on your credit report related to medical debt, you can dispute them with the credit bureaus.
Consider working with a debt forgiveness agency - Debt forgiveness agencies like Forgivey.com can help you negotiate with healthcare providers to reduce or eliminate your medical debt. This can help improve your credit score and increase your chances of being approved for a mortgage.
Medical bills can have an impact on your credit score when buying a house. If you have unpaid medical bills that have been sent to collections, it could lower your credit score and make it more difficult to secure a mortgage. However, there are steps you can take to minimize the impact of medical bills on your credit score, including paying your bills on time, negotiating a payment plan, disputing errors on your credit report, and working with a debt forgiveness agency like Forgivey.com.