Reader Question: Do Medical Collections Appear on Credit Reports?

We received a great question about medical collections from Katie yesterday:

I have a friend who has racked up over $7,000 in medical bills. Her debt has been sent to collections but she isn't the least bit concerned. She was told that her medical debt will not go on her credit report. I am under the impression that it does, in fact, go on the credit report. She does not plan on paying them back - she thinks they can't find her and won't be able to get the money from her.

I am trying to give her the most accurate information possible and am having some trouble finding the answer. Does medical debt go on your credit report? Can collections find her? If they do, what will that mean for her?

Yikes! What a mess. Unfortunately, Katie is correct. Medical debts that are sold to collections do appear on credit reports. These types of collection accounts can cause severe credit score damage. The medical debt records will remain on her report for 7 years whether or not she pays the collectors.
Katie's friend may be confused about a law that doesn't allow the names of medical offices to appear on credit reports. This regulation is designed to prevent discrimination by employers and other businesses based on health issues. Even though the medical provider name will be masked, the collection account will still appear on her credit report.

As for hiding from the collectors, it's more difficult than you would think. Collectors can find Katie's friend by researching public records or tracking the address posted on her credit report. Anytime the friend applies for credit, her address will be updated on her report and collectors can use this updated information.

I recommend that Katie's friend reads our articles called Collections Crash Course, Understanding the Fair Debt Collection Practices Act and this blog post specifically about medical collections.  Do you have some advice you'd like to share with Katie's friend? Post your suggestions and tips in the comments section below. 

Comments

[Tara]

I had a medical debt of 1,200. I have made $500 in payments over the course of 2 years. Recently I received a call from a collection agency for the additional $700. I told them I had been making payments to the Dr's Office and they informed me I was to make payments to them. What happens if I continue to pay the Dr's office and not this new collection agency?

[Rafael]

Dear Sir,
I have the same problem as Katie's. When I first came to this country I thought hospitals are free just like Canada and France. I went a emergency room due to sickness and hospital started sending me bill. I did not give my SSN to the hospital. Couple of months hospital gave the case to credit collectors. Do you think it will affect my credit since they don't have my SSN?