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Will medical bills hurt my credit score?

Posted By Legal Team | July 29 2021 | Firm News, Personal Injury

A serious accident can lead to a cataclysmic health crisis. From a jogger who is hit by a distracted driver to a high-speed highway collision caused by an impaired motorist, these accidents can leave people struggling with brain damage, multiple fractures, spinal cord trauma, paralysis and amputation. Unfortunately, these catastrophic injuries often lead to overwhelming medical debt.

For many, this overwhelming medical debt can represent severe damage to their financial security and overall credit score. Fortunately, the three major credit reporting agencies will make some significant changes to the way data is collected and evaluated. Experian, Equifax and TransUnion will make two specific alterations:

  • The credit reporting agencies will set a 180-day waiting period before including medical debt on the consumer’s credit report. They will include this six-month cushion to allow consumers to resolve any disputes with the insurers and rectify any payment delays.
  • The credit bureaus will remove medical debt from a consumer’s credit report after the insurer pays the debt.

From a hospital stay and surgical procedures to prescriptions and lengthy physical therapy, individuals face quickly mounting debt after any serious injury. Some injuries might ultimately require home accommodations and medical equipment during the healing process.

Lenders examine a consumer’s credit report to evaluate their financial stability and overall payment risk. Significant medical debt can damage a credit score, impacting the lender’s choice to approve a loan or lower an APR. After a serious accident or motor vehicle collision, it is crucial that you act quickly to protect yourself from financial harm. With experienced legal guidance from a Chicago injury lawyer, you could proceed through the personal injury lawsuit process more efficiently and reduce your risk of facing damage to your credit score stemming from medical debt.

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