Late Payments: Will They Affect my Credit Score?

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By now, you probably understand that failure to make good on your debts will definitely be reflected in your credit report and score. Regardless of your reason, leaving debts unpaid opens you up to numerous marks on your credit report, which will in turn drag your score down, down, down – until the debts are paid.

So, not paying your debts equals a low credit score, but what happens when you do pay, but you pay late?

Will late payments be reflected on my credit report?

The best answer here is “it depends.” If you make one or two utility payments that are only late by a few days, they probably won’t show up on your credit report. (But they might! Much depends on the company’s policies and the individual in charge of receiving payments for that company.)

Many times, medical debt causes significant headaches for consumers. Usually the headaches are caused by dealing with insurance companies. Insurance companies are notoriously bad at responding to claims in a reasonable time frame, which leads to red marks on your credit report. Often, codes are submitted incorrectly or multiple insurance policies are not properly coordinated. Further, some claims are initially denied but may be approved if resubmitted through the proper channels.

The bottom line regarding medical debt is that human error combined with strict and sometimes questionable policy rules lead to long wait times for some claims to be paid by insurance companies.

Why is my medical debt marked “Late” on my credit report if it is the insurance company’s fault?

This question comes up often, and the unfortunate reality is that creditors, even hospitals, doctors’ offices and other medical providers, do not care who pays their bill as long as it gets paid. Most providers do realize that there may be a slight delay for payment due to the intricacies of the insurance industry, however, they are not willing to wait for an extended period of time.

Patients who are waiting for their insurance company to pay their medical bill(s) are often surprised to find negative marks on their credit report because they don’t understand that if there is a delay on the insurance company’s side, medical providers expect the patient to pay the bill and then be reimbursed by the insurance company.

If you’ve recently discovered that some of your paid medical debt has been marked as “Late” on your credit report, you may wonder if you can get your provider to remove the “Late” status now that they’ve received payment. Unfortunately they don’t have to and typically won’t remove the “Late” mark from your report because doing so takes up more of their valuable time.

Additionally, if your medical debt was in fact paid late then it is accurately denoted on your credit report. The fact that it is marked as “Paid” is important (even if marked “Paid Late”), and you can add a note to the entry so that future creditors know precisely why it was paid late. If, however, your medical debt was paid and your credit report does not reflect payment at all, then you have a right to have the information changed.

Image credit: NursingSchoolsNearMe
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