I know lots of people have questions on this but here is my story anyways. I have two credit cards that I have almost paid off. On top of that, I'm only 23 years old and I have lots of medical bills that are unpaid. Besides that, I am paying payments on a car and insurance. Those two, I have not made any late payments. All of my bad credit stems from my past. I also go to school and need money for school so I don't have much to put towards my medical bills.
2007-12-14 06:38:43 · 4 answers · asked by Wendy G 4 in Business & Finance ➔ Credit
ok, here is the deal.. DO NOT pay the medical bills... most lenders do not even care about medical bills, and those who do will ask you to pay them off.
If you pay NOW on those bills, your credit will get worse. Your credit score is based on account aging. The older a collection account gets, the less it impacts your credit. HOWEVER, if you start paying on it, your aging starts over.. your credit score could drop substantially... Now, on your credit cards, if they were collections, once you make your last payment, the status is for 7 years from date of last activity. So, if it is a paid collection for example, the day you make the LAST payment, you will have a paid collection (which is still derogatory credit) for 7 years on your credit.
If you have any other questions about this, go ahead and message me.. lots of people mean well, but give ignorant advice because they really do not understand how credit underwriting or credit scoring works
2007-12-14 06:53:33 · answer #1 · answered by Rafael P 4 · 0⤊ 0⤋
To add to Rafael's post...although I personally don't know anything about the aging part...
As long as the collections company continues to refile every so many years, the debt will continue to impact your credit rating. That plus the fact that you do owe for services rendered. As long as you make token payments, based on your ability to pay, your creditors can NOT take further action against you. That means that the person/organisation holding you paper can not sue you (the courts will toss the case) as long as you can show you are making an effort to pay-off the delinqent account. However, please note the key term... "Based on your ability to pay." If you're making $500k a year and have a couple of million in debts, and you're only making token $20 a month payments, the suit will proceed. If you're only making $20k and have a couple hundred k in debts...the same $20 token payments will prevent the courts from allowing the suit to go forward.
Please note...where ever possible, deal directly with the original debt holder. The collections agency will likely be willing to settle for a lesser amount, but they will also be much less pleasant about it. Incidentally, once (most) companies send an account to a collections agent, they have "sold" the debt off, so they can be ameniable to a lesser amount.
2007-12-14 15:38:20 · answer #2 · answered by jcurrieii 7 · 0⤊ 0⤋
Rafael is correct.. I'm a Credit Analyst in the auto industry and we do not care about medical collections. Keep on paying your installments well and try not to rack up the balances on your credit cards and you'll see your score go up over time.
2007-12-14 15:10:22 · answer #3 · answered by kta kta 2 · 0⤊ 0⤋
Have you contacted the medical creditors and attempted to work out an extended payment plan?
2007-12-14 14:41:54 · answer #4 · answered by npk 7 · 0⤊ 0⤋