Delinquent Medical Bills
Delinquent medical bills can adversely hurt credit scores. To what degree depends on several factors including the guidelines of each particular lender. The amount owed in unpaid medical bills also has a bearing. Lenders hesitate to make a loan to someone who has more debt than can be paid.
Some lenders are more likely to grant a loan if the outstanding medical debt is large, versus small. Lenders are aware that astronomical medical bills can be hard to pay. They do expect to see an effort being made to pay the debt and are willing to help. However, if you ignore the debt, companies are known to send them to collection agencies regardless of the debt. A small outstanding debt should not become delinquent.
Making Payments To Delinquent Medical Bills
It makes a difference if an individual is attempting to pay the unpaid medical bills. Making a monthly payment can be the difference between getting credit or being denied credit. A monthly payment shows good faith in trying to satisfy the debt. One may still be able to borrow money or get a credit card. The amount of credit extended will be considerably less than would have otherwise been extended.
Non-payment of medical bills may end up with a lien being place on a home. That means if the home sells, the holder of the lien will get a portion of the money to satisfy the unpaid medical bills. The more liens placed on a home, the less collateral for lenders should a loan go into default. Lenders rarely grant a loan on an asset holding a lien.
An unpaid small delinquent medical bill seriously hurts a credit score causing lenders to deny loans. However, if a loan is granted, it will be at higher interest rates. If wages are garnisheed, then this alerts lenders that less income is available to repay any credit extended.
Most outstanding medical bills eventually gets turned over to a collection agency. Some reduce the amount owed to settle the debt. It is a good idea to accept the offer. Once it is paid, a notation on the credit record indicates the unpaid medical bill is settled.
Large medical bills can be an indication of bad health. Lenders will not extend a loan if they believe an individual will not live long enough to repay the debt.
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