Medical debt acct reported to credit agency

[Jdenver]

Hello

I was recently notified by a bank I no longer use that a negative entry was entered into my credit report. Upon investigation I found that this entry is a medical bill for $610.00 and was at the time of discovery (when I verified it via a credit report search) 2 years old, now the debt is approaching 3 years since being recorded.

The questions I have which I hope I can get some input are the following:

1) Should I choose to followup on this and request verification of the debt per FDCPA, would that have an impact on the entry in my credit report? Put another way does it reset the clock or give the collection agency any sort of advantage that they currently do not have?

2) Knowing that negative entries will usually exist for 7.5 years before having to be removed from a report, since I am approaching the halfway mark and have all the credit I will need for the foreseeable future, should I just wait it out and let it age out?

3) As the debt ages does the negativity of the debt diminish as well? Put another way as the debt ages will my score increase?

4) Knowing that medical debt is now viewed differently when it comes to consumer debt (agencies not reporting debt of $500 and below) why would such debt reduce my score by 100 points after having a life history of good to excellent credit?

5) When I look at the report I see that it was updated or somethhing to that effect during that month (dont recall the exact wording), what does this mean and does it affect the 7 year time limit?

Thank you for your input.

[GZG]

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@Jdenver wrote:

Hello

I was recently notified by a bank I no longer use that a negative entry was entered into my credit report. Upon investigation I found that this entry is a medical bill for $610.00 and was at the time of discovery (when I verified it via a credit report search) 2 years old, now the debt is approaching 3 years since being recorded.

The questions I have which I hope I can get some input are the following:

1) Should I choose to followup on this and request verification of the debt per FDCPA, would that have an impact on the entry in my credit report? Put another way does it reset the clock or give the collection agency any sort of advantage that they currently do not have?

2) Knowing that negative entries will usually exist for 7.5 years before having to be removed from a report, since I am approaching the halfway mark and have all the credit I will need for the foreseeable future, should I just wait it out and let it age out?

3) As the debt ages does the negativity of the debt diminish as well? Put another way as the debt ages will my score increase?

4) Knowing that medical debt is now viewed differently when it comes to consumer debt (agencies not reporting debt of $500 and below) why would such debt reduce my score by 100 points after having a life history of good to excellent credit?

5) When I look at the report I see that it was updated or somethhing to that effect during that month (dont recall the exact wording), what does this mean and does it affect the 7 year time limit?

Thank you for your input.

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AFAIK, medical debt is removed now when paid by per the policy of EQ/TU/Experian

pay it and it should come off. given the balance, I would just pay it IMO. 

while some newer credit scoring models are more generous when it comes to medical debt, any negative information of any sort ruins your ability to have a high credit score. 

good news though, presumably it is medical debt and thus should be removed when paid, so pay it and you should be able to get that removed.

somebody else might be able to chime in on the 'not paying it' route, I can't really speak to that, but given the amount, IMO, I'd just pay it. Are there other unpaid medical bills that you might expect to report? That might change the logic of just paying this one. 

[pizzadude]

Agree with the comment above, medical collections should drop from your report once they're paid.

Unfortunately it's a collection and these will tank your FICO scores as you've seen.    At some point in the future all medical debt *might* be excluded but that is still TBD, with the exception of amounts less than $500 ( paid or unpaid ) which aren't reported. 

[FlaDude]

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@Jdenver wrote:

2) Knowing that negative entries will usually exist for 7.5 years before having to be removed from a report, since I am approaching the halfway mark and have all the credit I will need for the foreseeable future, should I just wait it out and let it age out?

3) As the debt ages does the negativity of the debt diminish as well? Put another way as the debt ages will my score increase?

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2) Ignoring and waiting for it age off can work if you're not in a hurry, but until it reaches the statute of limitations in your state, you could still be sued or have the debt turned over to a collection agency.

3) I'm not sure about collections, but late payments do have less effect over time until they finally drop off your report so hopefully similar.

[GreatLife]

Call the original medical facility or provider and ask if you can pay them directly and have the debt recalled from collections.

[Jdenver]

Thank you for the feedback. If I were to pay the debt off would my score go back to what it was before the reporting?

If it is removed would there be no indication it was ever there?

Yes this is medical debt and the only debt, not sure what doctor its associated with BC none of them have said anything and I go regulalry for checkups and stuff.

Is there a way that is usually successful in negotiating it down to a lower $$? Have no experience with this.

[Jdenver]

That would be a good idea if I knew who it was from, I only see the collections agency name in my report. If I were to find out who it was would them recalling the debt be an option? Any down side? Thank you.

[Jdenver]

Thank you for your feedback.

[Snook_on_the_Line]

An unpaid collection will continue to keep your score down significantly all the way to the end.   

I had a single collection as my only negative mark on my credit and when it was removed my score jumped 78 points.    

it was  six years old when I had it removed 

[sjt]

@Jdenver 

As others have mentioned, medical collections are removed once you pay or settle the collection. If you do not know what the medical collection is for, I would do a debt validation. Also, if it's worth your time and energy, I would see if the medical bill should have been covered under your insurance plan. A lot of times, the medical provider miss-codes the bill.

Once the collection is removed from the CRA, your score will return to the score you had prior to the collection.

Negative items fall off your report a 7 years, but you can request and early deletion up 6 month depending on the CRA.

I was told that medical collection impact your score differently then a regular collection, so Im surprised at that credit score drop. Generally, the higher the score you have, the bigger score drop when a negative item is reported.