Debt Management
Managing credit scores, high interest debt, and medical bills.
The Reality of Debt
Cost of debt = Interest.
Pitfalls: Amassing interest expense and hurting credit score.
Pitfalls: Amassing interest expense and hurting credit score.
Strategy: Paying down high-interest debt first is a common avalanche strategy.
Negotiating Debts
- Apply for assistance / discounted care
- Hospitals will often negotiate
- Ask for a lower price
- Set up a payment plan
Hospital Bill Question Script
Best practices:
- May I request one financial contact for all my billing from this hospital?
- I would like to see if I qualify for financial assistance.
If something on the bill seems wrong:
- Can you please send me an itemized bill?
- I would like to speak to someone about my bill, because I have noticed a few things that look like errors.
When you are negotiating:
- Is it possible to apply for financial assistance retroactively?
- Is there a discount if I pay out-of-pocket rather than with insurance?
- I was wondering if we could set up a payment plan for this bill with 0% interest?
- Can you confirm this will stay out of collections as I pay it back?
- May I have these terms in writing?
Credit Scores & Medical Debt
Current Events: Reporting
- Credit bureaus typically do not list medical debts if:
- Paid medical debt generally does not appear on credit reports.
- Medical debt less than one year old is commonly excluded from reporting.
- Medical debt under $500 is commonly excluded from reporting.
- Check with the CFPB for your state's specific laws.
Utilization
Keep utilization low. Do not close old cards as it reduces your total available credit.
Check Reports
Use annualcreditreport.com to check all three bureaus for free once a year.
Dispute
If you see medical debt that should not be there (paid, under $500, new), dispute it immediately.