By Carmella Beroth, Debt Mangement, Inc
What is the purpose of Credit Reporting?
To determine your ability and willingness to pay…
Mortgage, car payments, credit card payments, student loans, personal loans, and medical debt.
Which of these are associated with 50% of all bad debt collections on a credit report?
MEDICAL DEBT!
Assigning debt to the patients credit report affects the patient’s ability to borrow money, rates of interest, access to credit, insurance premiums, and possibly future employment. There are many people who can look at someone’s credit.
- Potential lenders
- Landlords
- Insurance companies
- Employers and potential employers
- Some groups considering your application for a government license or benefit
- State or local child support enforcement agency
- Someone who uses your credit report to provide a product or service you have requested
- Collection agencies who are assigned your debt
There are new rules that are being projected in regard to credit reporting. Some that may affect your industry.
Paid or settled medical debt will increase score; new rules are calling for medical debt to have a lesser impact on the patient’s credit report.
7 years to 4 years; the new rules are calling for medical debt to only affect the patient’s credit report for 4 years instead of the current 7.
New rules have an incentive for patients to work with collection agencies. This can prove important to your practice.
It is in any practice’s best interest to send accounts to a 3rd party company to help recover money when the bill is 120 days. This will keep the debt fresh in the minds of the patient and also your office will have better luck recovering the money quicker.
