What can I do with old medical collections on my credit reports?
I have several medical collections that are more than 2 years old. I was told they are not affecting my score much, but my score is below 620 for other reasons that I am repairing and I would like to do the right thing with these collections that would raise my score and enable me to refinance my house at today's lower rates. What can I do with them to achieve these ends?
One of them was settled at 50% and I have a letter, but one of the bureaus still reports it as unpaid at the full amount. What can I do to get that changed?
What can I do with old medical collections and my credit reports?
You will need to prepare a dispute letter to send the credit reporting agency. You will want to include the letter or agreement to settle, and proof of payment. You should also send the dispute directly to the company that is reporting the unpaid balance to the credit reporting agency. Send certified mail return receipt requested. It may take 4 to 5 weeks to get it resolved.
Post an update of that the outcome of your dispute is in the comments below. If for some reason they still say the amount unpaid is accurately reflected on your credit reports, we can go from there.
Negotiating your remaining medical debts.
It will help me to offer more direct and actionable feedback about the settling the other medical bills if I knew the answers to the following questions.
- What are the amounts of the remaining unpaid debts?
- What is your capacity to fund payment arrangements?
- What is your time line for completing your home refinance?
Settling debts that are as “stale” as 2 years old can often “refresh” them. This means that, while you are doing the right thing in resolving the accounts, you may experience a dip in your score for several months as a result of new information being updated on negative entries. That may/may not affect the interest rate you would get when you refinance.
Much is changing about how paid medical debts that went to collection will impact your credit scores and financing options. Older credit scoring models still factor unpaid collections heavily, where newer ones factor this far less, and coming ones perhaps not at all.
Regardless of all that, unpaid collections can make it impossible to get your loan approved, so you will likely have to proceed with negotiating payments no matter the impact to credit.
Anyone with questions about correcting medical bills on your credit reports, or negotiating payments, is welcome to post in the comments below for feedback.