THE BLOG
10/22/2014 05:46 pm ET Updated Dec 22, 2014

How Can I Get Medical Bills in Collections Off My Credit Report?

This weekly Q&A addresses questions from real patients about healthcare costs. Have a question you'd like to see answered? Submit it to AskChristina@nerdwallet.com.

 
Question:
 
Two years ago, I was hospitalized with pneumonia. Because my bills were so high, a few of them went to collections. While I've worked hard to pay them off, they're still on my credit report and are affecting my ability to get a loan. What can I do to get them removed?
 
Answer:
 
Congratulations on getting those bills paid off. Many people struggle with medical debt--so many, in fact, that it's the leading cause of personal bankruptcy in the United States. But as you're learning, even after you've resolved your debt, it can haunt you for years to come.

If your credit report is accurate, there isn't a whole lot you can do to have the previous debts removed, unfortunately. Time is the only solution, and it takes seven years for collection accounts to fall off of your report.

Credit scores, however, are a different matter. Recent changes in credit scoring models could boost your number, and possibly change the outcome of your next loan application.

The Fair Isaac Corporation, the company whose credit score is most widely used by lenders, announced in August that it would start calculating scores differently. Its new FICO 9 model weighs medical debt in collections less than it does other types of debt, and does not consider accounts already paid in full. Therefore, while your medical account may appear on your credit report, your score will not suffer as much for it. For some people, this change could increase their FICO score by 25 points.

The catch is that it'll take time for lenders to adopt the new model, and in some cases, they'll also scrutinize your credit report. If you were rejected for a loan prior to FICO 9's implementation, there's a chance you'll get a different result after--but know that, due to your history, it may still be hard to get approved for a mortgage or other loan.

Credit pulls done by lenders can hurt your credit score, so before you reapply it's best to take out some of the guesswork. Call lenders who've previously rejected your loans to discuss your denial. Once you figure out why you were denied, you can take steps to improve your credit score and increase your chances of getting approved for a loan.

Next week: How to negotiate unrealistic hospital charges. Check back for my answer!

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