How can I improve my credit score. I did not pay an ER bill when I was 19 now im 23.?

Question

ever since than I have had poor credit 618 score. Thats the only thing on my credit score, If I pay them will my score raise? Im saving for a house and I don't want my credit score to hold me back.

Muga, My mother told me that hospital bills dont end up on your credit report too, thats why i didn't pay them. But my college Finance teacher and all three credit agencies seem to think so. So thats just a myth

Answer 1

Unfortunately, it's not that easy. Paying off the debt now will actually lower your score in the short term.

Newer items in your credit history are rated higher than older items, and after 7.5 years, the bad items (except bankruptcy) disappear altogether. Paying an old bill off this month can actually be worse than just ignoring an old bill because now, the old bill has "current activity" so it's rated higher.

If this is "the only thing" on your credit score (no credit cards or loans on your credit report), the only way of improving your score is to show you've handled other debts correctly.

If this is the only black mark on your credit report, and everything else is on time and handled responsibly, then the ER bill will play less importance the older it becomes.

When it comes to buying a house, some lenders will require the ER bill to be settled before granting a loan, at which time, you can negotiate paying off the debt for a lesser amount owed, possibly for 10-25% of the full amount owed.

Just add the amount of the ER bill to the amount you're saving for a down payment, and be prepared to pay off the ER bill when the lender tells you to.

Answer 2

Do not pay the bill! I don't know how people think that if you pay it, it will bring up your score. Your credit score does not take into consideration if it is paid or not. You are probably almost out of the statute of limitations (most states 4 years) so why pay it if they cant come after you for it? If you pay it, I guarantee that your credit score will plummet because it will bring the old debt current. After 2 years a debt hurts your score very little, but if you pay it I guarantee you that it will hurt your score. You can dispute it with the credit agencies and see if it comes off, which most of the time it will from collection agencies because they do not have the paperwork anymore to validate the debt, especially after 4 years. If you need help email me and I would be glad to help, just don't pay it.

Answer 3

If one late bill is the only thing on your credit report, it may not be what is holding you back. Your credit score is a combination of your credit history, payments made on time and the amount of credit you are using compared to the amount of credit you have.

Do you have utility bills in your name? Making these payments on time (or late) can affect your credit score.

If you don't have any type of credit card, getting one and using it responsibly will help your credit immensely. Use it for small things every month, and keep the money aside so you can pay the bill in full and on time every month.

If you haven't already done so, you may want to pull your credit report and make sure that everything this is on it is accurate, and yes even medical bills will affect your credit score, they just can't indicate what type of medical care it was. I use www.freecreditreport.com for mine at least once a year.

Paying your medical bill off now could be both good and bad. Sure it will obviously look better if it says its paid in full, but there is a limited amount of time that an account with no movement can stay on your credit report. Its usually about 7 years, so you can expect this perticular thing to fall off of your report in 3 years or so. Paying the bill basically re-activates your account which means for the next 7 years it will show up that it was paid in full, but it was paid very very late. Some credit reports will show you how much longer you can expect something to stay on your report, if you pull yours up, see if your report includes this information and make your desicion accordingly.

If you start laying a solid credit history down for yourself now, when you go to buy your house, the lenders will have recent, positive things to consider as they make their decision.

Hope this helps!

Answer 4

yes hospital bills show up on your credit report I have a few on mine. I would say you have some options. if you let it go unpaid after 7 years it would drop off your credit report however you will still owe the money it just wont show on your report. If you pay it now your score wont increase much because it has been showing as bad debt from the day it was entered it on your credit report. If you are wanting to pay it contact them and offer to pay it off for less than you owe most places will do this. Or you might try and dispute it even though you know you owe it you can dispute anything on your report and maybe the place who entered it wont reply to the request at that point the agency has to delete it from your file. have you ever been to www.annualcreditreport.com it is totally free no gimmicks. i have used that site for two years and will again in march you can only get your report from there once a year for no cost at all you dont have to sign up for anything. hope this helps

Answer 5

If you want to buy a house one day, you will have to settle this debt. You will not qualify for a mortgage if you have an outstanding debt for medical bills.

Contact the collection agency handling your account for the hospital. If you have a portion of the bill, about 50% of it, tell the agency you will pay them half of the bill right now if they accept that in full. If they say they will, get it in writing from them, and then pay it.

They may want to negotiate with you to get you to pay a higher amount to settle, and they will be very, very rude to you and treat you like crap. You have to be firm, don't get upset, and don't take what they say personally. If the rep you talk to is impossible, ask for a supervisor. Be objective, strong and firm. Whatever you do, don't let them upset you, or they will eat you alive.

Once you have a letter from them saying what you must pay to settle the account, make sure you have a copy of the lette and a copy of your proof of payment because you will then have to contact all three credit bureaus in writing and inform them that the debt has been paid and ask them to update your file. This will take at least a year for them to do, because the credit reporting agencies don't care about you, and it may take awhile to get their attention, especially because you need the attention of all three agencies.

This is a nightmare and a disaster, and the only way to take care of it is to take care of it. Let it be a lesson learned -- pay your bills, and don't listen to people who dont' know what they're talking about.

One more thing: Make sure you block your number from coming up on the caller ID when you call the agency, or else they will hound you day and night until you're in the grave.

Do not give them your address either. Find an alternative address or use a post office box for them to send any correspondence to. They may change tactics and act like they're your friend and they care about you and want to help you, but this is a lie. They hate you and they want you to pay a ton of money because they get a commission on it.

Answer 6

Sounds like it went to collectins and THAT is how it ended up on your credit score.

Contact the collection agency and find out what you can settle for-- its often less than the dollar amount on your credit report. Pay it in full and then once paid, dispute teh charge on your credit report. They may not respond to the dispute becuase they've been paid-- or if they do it will atleast be updated as paid and will help your score a bit.

You also need to open up a couple small credit cards to start building a good payment history that will balance out that bad collection account.

Answer 7

1st contact the agency holding the bad debt, they may be willing to negotiate the amount to be paid back. For hospital bills ,for future reference,even if you pay only a very small amt each month, say$5 , t hey must accept that payment and will not turn it over to a collection agency.And yes, hospital bills do count on your credit score! It`s wise of you to take action on cleaning up your credit now. You`ll have a brighter financial future ahead. Good Luck!

Answer 8

Pay off ALL your bills or NO one will let you buy a house.
(don't get any new credit cards, don't buy a new car, etc)
Bad credit follows you for 7 yrs...if you pay OFF the bills contact the credit bureaus (all three) and make sure it shows you've paid your bills...
Trust me...if you want to buy a house with a LOW interest rate, you wanna have C L E A N credit...

Answer 9

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Answer 10

i have been told medical bills are rated better then revoving (credit card) bad debt...yet that was when buying a car
when i purchased my house they did make me pay off a old outstanding gym membership to bump up my score. Good planning on your part to do this first!!!