What should you do if past due medical bills are hurting your credit score?

I am a small self employed person. My credit score has dropped due to a couple Dr. bills.

I have a 20,000 balance I want to transfer.I am paying 18.99%. My FICO score went from in the 800’s to the 600’s due to Dr. bills which I am paying on. Other than that there is only one other account -simply wireless which was a mistake on their part.

I never activated or used the phone 18 years ago. Do you think it would be worth trying to transfer? If so who do you recommend?

Thanks Sheri

Thanks for your question Sheri! There are a few steps you will want to take before trying to balance transfer, because your score is a little low to be able to transfer the total amount. You might be able to get a partial balance transfer at this time, but the rate probably wouldn’t be a whole lot better than what you have right now.

So, instead, I suggest taking a few steps prior to transferring your balance.

Step 1: Pull your credit reports. All three of them. Start by visiting Annual Credit Report.com. Make sure you view your reports at Exuifax, TransUnion, and Experian.

Which types of negative accounts do you have? Are all of the negatives medical bills aside from the simply wireless?

Step 2: Challenge anything that you reasonably can. If the Simply Wireless account was a mistake, then challenge it and get it removed from your credit reports.

If you have multiple past due medical bills, but you are currently paying on those accounts, go back and challenge them too. As long as they are being paid, you should be able to have the negative accounts removed.

If the company validates it when you challenge it, call the medical company and explain what they are doing. Tell them that since you are current on your accounts you want to remove the old negative information. They should work with you, as long as you are friendly.

You can learn more about how to challenge items on your credit report here:

Now, if you are having trouble making your medical or credit card payments, you should know that you are a good candidate for debt reduction / debt negotiation.

What is Debt Reduction / Debt Negotiation?

When you work with a debt negotiator, they will help you to immediately reduce the total amount of your debt.

How do they do this?

Debt negotiators begin by closing out your current credit accounts. Then they call the credit card company, and they negotiate a new interest rate for you, as well as drastically reduced monthly payments. It is possible they can also handle your medical bills for you too, and even reduce the amount you owe there.

Now, debt negotiation will hurt your credit score (because they have to close your accounts) BUT they can reduce your debt by as much as half of what you owe.

That would make it a lot easier to get everything paid off, and you would be debt free sooner, with less stress. Especially if you are dealing with medical issues.

We work with an excellent Debt Negotiator named Sam Sky. Sam has worked as a debt negotiator for years, and is also the author of a credit repair book.

If you’re interested in seeing how much he can reduce your debt, you can fill out a quick form to contact him. He’ll be able to explain he process to you much better than I can, but it’s very simple. You will take your accounts to him, he will negotiate on your behalf, and reduce your debt. You will make monthly payments to his company, and in turn that company will send the money to your creditors each month.

The real benefit of this is how much your payments will be reduced monthly, as well as lowered interest rates and more favorable terms on your loans. Definitely something to look into!

Here’s the contact form for Sam.

If you do decide to use a debt negotiator, then you will have some cleaning up to do once your debt is paid off. Particularly where your credit score is concerned.

Once your debt is paid down, you can look into getting a small limit secured card. If you don’t charge much on the new card, and you make regular payments, then your credit score will completely recover within a couple of years.

If you’re worried about your debt, it’s really a small price to pay. Just understand that if you negotiate your debts this way, you won’t be able to get a loan for a couple of years afterward while you rebuild your credit.

If you do not want to use debt negotiation, and still want to balance transfer:

As far as balance transferring goes, make sure you clean up your credit reports, and then give it a couple of months before you apply. This will give your credit scores a chance to go up before you try to take on a new loan.

Thanks for your question!

Have a question for us? Leave a comment below!

Keep Reading:

• Credit Restoration Brokers – An Interview With Sam Sky
• Review of The Credit Book By Sam Sky
• Business And Personal Debt

This entry was posted on Monday, March 30th, 2009 at 16:26 and is filed under Debt Reduction FAQ. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.