Freedom Financial Shares Valuable Insight on Medical Bills and Your Credit | Credit Repair Expert

Medical expenses are a part of life. Even if you are extremely healthy, eat right, and exercise, you could still get into an accident. Or your child or spouse could get sick. Sometimes medical expenses are planned, like in the case of a pregnancy, yet many times they catch us by surprise. While insurance covers some bills, it typically does not cover all of them. In many cases, you don’t even know what you are spending at the time of the illness or accident. It is only weeks later when the bill arrives that you find out. And for some, this could mean thousands of dollars owed. How you handle these bills can impact your credit. While there is a new credit rating system out that weighs medical bills differently, according to Kevin Gallegos of Freedom Financial, people are losing this credit protection because of how they are paying their medical bills.

Many Americans Pay Medical Debt with Credit Cards

According to a survey out from the Federal Reserve, a staggering 38% of Americans prefer to pay medical bills with their credit cards. Paying your medical bills with credit cards means that while your doctor is paid, your debt is still out there. And now it is collecting interest each month. Plus, your debt to spending limit ratio on your credit card is now higher, which can negatively impact your credit score.

Freedom Financial warns that by paying your medical bill with your credit card, the new credit scoring system (which weighs medical bills in collections as less than other unpaid bills) will not recognize the bill as a medical expense anymore. Once it is part of the credit card debt, there is no way to differentiate it from money spent on a vacation, groceries, gas, or anything else. So, if you fall behind on your credit card because of your medical bill, you won’t get the same level of credit protection.

What Should You Do About Medical Bills?

Now, if you can’t afford to pay your medical bills and moving the balance to a credit card is a bad idea, what can you do? The best way to handle medical debt is to address it early on. When you call the hospital or doctor’s office where the debt is owed, you may be able to work out a payment plan for the debt. You can make affordable monthly payments and the debt does not go on your credit report as delinquent. Plus, you won’t be charged the high-interest fees that your credit card would tack on to the bill.

This option is very effective on new medical expenses, but what about older bills that have already been reported as delinquent? According to Gallegos of Freedom Financial, FICO has also changed the way that it handles unpaid bills that are settled. These bills, even large medical bills, will no longer count as unpaid bills on your credit report once the debts are settled. Essentially, your score will treat paid bills as paid, even if they were settled after going to collection.

Freedom Financial Could Help You Settle Your Unpaid Medical Bills

With Freedom Financial you could put your unpaid medical expenses behind you. They are the largest debt negotiator in the nation and have programs to fit a variety of debt situations. When you work with one of their Certified Debt Consultants, they will customize a plan to fit your specific needs and ability to pay. They have resolved over $6 billion in debt for their clients and could help you, too. So if you are ready to regain control of your finances, give them a call for your free, no-obligation debt evaluation.

Freedom Financial

Steven Millstein

Steven Millstein

Steven is a Certified Financial Planner (CFP) and Certified Credit Counselor (CCC) and joined CreditRepairExpert in June 2016 as a Credit Repair Adviser to continue his mission of making a difference in the world. Everyday, Steven speaks with individuals and families in the online credit repair community to answers questions and offer help people on their journey to repair their credit rating. If you have a story idea for Steven or you would like help with credit repair, please email him at
Steven Millstein