05 Oct How Medical Debt Affects Your Credit
Selling a structured settlement or annuity can be a great way to acquire a significant amount of money fast. It can provide you with the means to take care of any of the many curves life throws at you. One of the best ways you can utilize this money is by paying off medical debt you’ve accumulated recently or over the years, which can adversely affect your credit score.
Credit bureaus will wait 6 months (180 days) before adding medical debt to your report. The average emergency room visit will cost you $1,233, but serious illnesses, chronic conditions, and surgeries can amount to tens of thousands of dollars in a hurry.
Approximately 43 million Americans have some kind of medical debt on their credit reports and a third of those people have otherwise perfect credit. In fact, about 52% of all debt on credit reports is of the medical variety, according to a new report from the Consumer Financial Protection Bureau. Fortunately, the average amount of medical debt on credit reports is manageable, at an average of $579.
Paying off a bill over time means you end up paying more in interest in the long run. Having the cash on hand from selling a settlement can allow you to pay for it all in one lump sum. Some doctor’s offices and hospitals will even give you a one-time discount for paying off your bill this way.
Don’t fall into the trap that small bills are insignificant, either. Even a single medical-related collection for a $15 co-pay can cause your credit score to fall drastically. Any one credit collection can affect your FICO score by 100 points. The damage to your credit score will lessen over time, but it will stay on your report for seven years.
As the saying goes, “Don’t put off until tomorrow what you could have done today.” This could not be any more true when it comes to medical debt and credit scores. Selling a settlement or annuity now can save you thousands of dollars in the future.