Medical Collection Accounts

When we go see a doctor, the front desk assistant gives us an application to fill out. We have to write down our name, address, date of birth, social security number, medical history and reason for our visit.

The second thing they ask for is if we have health insurance. Those that do not have insurance have to pay the same day they see the doctor. Those that have insurance have to provide the insurance card when they check in.

The doctor's employees usually verify your health insurance while you are waiting to be called in by your doctor. They call your insurance company to make sure your policy is active. They do this because they want to get paid for their services. I mean, after all, if we go see a doctor, we need to pay for their services.

Now, what you don't know is what happens after you leave your doctor's office. Remember when I mentioned that they usually call your health insurance to check if your insurance policy is active? Now this is the problem, the employees that are supposed to contact your insurance to send them a bill for your visit are usually too busy calling in patients to come in for a follow up, so that they can continue to issue more bills and before they notice, time flew by, they never billed your insurance company within the time frame allowed and guess what they end up doing?...

They end up selling your medical bill to a collection agency without even trying to get paid by your insurance company. A few months later, you will get a collection agency letter by mail, you open it, you remember you provided your insurance card to your doctor and you simply ignore the collection letter. This is a big mistake!

When we receive a collection letter, it is for a reason, and the biggest mistake anyone can make is to ignore them. Why? Because by law all collection agencies must tell you in writing that you have 30 days from the date on the letter to dispute the validity of the debt.

Many of you ignore the letters, thinking it has to be a mistake since you had already provided your insurance card to your doctor when you went to see him/her. What you don't know is that after 30 days have passed, the collection agency will report your debt to the credit bureau. Next thing you know is when you want to buy a house, refinance your mortgage, buy a car or apply for any type of loan and you do not get approved thanks to all the collection accounts reported on your credit report.

By the time you realize what happened and you want to start asking questions, it is already too late. The damage has been done. Your credit is messed up and when you start calling those collection agencies to ask them questions, they treat you like you're a delinquent. They have trained collection specialists that answer the phone with an attitude and try pretty hard to intimidate you while trying to force you to pay them. The majority of those collection agencies will lie to you and threaten you with sending you to jail, suing you in court, garnishing your wages, etc. You would be surprised if you only knew how many people fall for this and up paying up their medical collection accounts when they call to inquire about it.

The bad thing about this is that even after paying a collection account, this does not improve your credit. To the contrary, the collection agency will report to the credit bureau that the account has been paid, however the account will remain reported on your credit report for the next seven years as "Paid after being in collections." This means that whenever you apply for credit, future lenders will always see this. This does not make you look good. Think about it. If you were a bank and someone came and asked to borrow from you and when you run their credit report you see a bunch of collection accounts reported as "Paid after being in collections." would you feel comfortable lending your money? We all know the answer to that.

Okay, so now what? What is the next step to fixing this mess? We already know that calling the collection agency will only frustrate us even more. We already know that paying off a collection agency will only damage our credit further, and so we are left with a few options. We ignore our credit report and we wait seven years for those accounts to go away. We file for bankruptcy: this will damage our credit for the next seven to ten years as well. Or we hire the services of a credit repair agency.

The majority of credit repair agencies are in the business for the money, not because they know what they are doing. They usually get you to sign up for a monthly membership fee which they will drag you for years and years, disputing maybe one account a year because the last thing they want to do is to be done cleaning your credit because they want to keep you signed up to that monthly payment.

Though this is your best way out, if you do decide to get yourself a credit repair agent, make sure you check out their reputation, such as internet reviews. To find out how good or bad a credit repair agency is, look up their company name on Google or other web browser provider and type in "Reviews." You will find companies that are rated with one star, two stars, all the way up to five stars. The more stars, the better the company. The customer's reviews usually guide you in making the right decision. If you don't find reviews on a particular credit repair company, do not use them!

Most of the collection agencies that are reporting a debt to your credit report can be deleted from your credit report. You don't have to pay any collection agency that does not have a signed credit application signed by you with the original creditor. For consumers, there are laws that protect you. There are Statute of Limitations laws for each state that protect the consumers from collection agencies and other business entities. Most collection agencies have a number of years allowed to collect or sue you in court. The majority of collection agencies are all in violation of those laws, and this is when an experienced credit repair agency can help you.

Written by:

Jeannette Perez

Credit repair specialist.