Question regarding credit scores.

Hey everyone, my question is regarding my credit score. Throughout my younger years I've been pretty neglectful when it came to my credit score but now that I'm older I'm trying to be more responsible. I have a plan of how I am going to improve my score but something came up that I'm unsure about the right way to go about it.

My credit score is around 430 (so embarrassing ). I never had any credit cards but I did fall behind on a Student Loan which I'm working towards getting caught up on. I also have 2 delinquent utility bills which are not coming off anytime soon but I'm going to try to write a letter for pay for deletion I figure it's worth a try and those two bills equal around $500

I've also apparently didn't realize I owe my primary care physician around $600 for several office visits in the past and this is what my confusion is regarding. These balances I owe for these visits have been sent to a collection agency. I recently had a doctor visit so I did the right thing and called them to ask what was my balance and they told me the full amount (from the last visit plus the previous visits)

So I don't know what to do. Obviously I realize I don't have to pay twice. And I realize how collection agencies work (buying the debts for pennies on the dollar). I don't know if I should try to work something out with the collection agency, or do I pay my physicians office directly and dispute the accuracy of my credit report with the agency. Or if there are any other options that I haven't thought about.

Thank you so much for listening and offering your advice and insight

Well, your credit score is only important if you're looking for more loans. I have no idea what my credit score is and I don't care, because everything is paid off and it doesn't matter to me.

But, yeah. To raise your credit score you want to show that you pay your debts on time. You certainly want to pay off these debts and you want to get a letter from the collection agency that you paid off the doctor's bill. You also want to demand the credit agency takes it off your credit report and off the doctor's accounts. The letter will also prove you paid off the bill. That way the doctor's office won't charge you twice when you go to the doctor. Of course, if you want to pay the doctor the full amount, then usually the collections folks would take it off their records and you would want proof that you paid off the doctor. Offer about half of what you owe to the utilities and get a letter you paid it in full from them.

Then in the future, you probably want to get a couple of credit cards, charge things you would have paid cash for, and then make sure you pay off all the bills every month. That will show you're current and will raise your score. Ironically the credit score people don't care how much you borrow, only whether you make the minimum payment in full. There's been some talk about changing the way credit scores are figured, but nothing has been done.

I worked in collections and with the credit industry for a while. First and foremost, write each company with a request in writing of the proof of debt. If they oblige, you can then ask for what's colloquially called a "pay for delete." That's an offer to pay the debt in full for them to redact the derogatory information. Technically, this is a no-no for companies and firms to do, but many still will. At the end of the day, the worst they can say is no. If they do agree, make sure that you likewise have that in writing.

If you've already paid, it's a bit tougher. You can try to write them directly with a humble note, asking to rescind. Again, a "worse they can say is no" scenario. There are of course more options, but beyond that, practically speaking, I'd simply pay off what you owe in full and, at the very least, start the 7 year record on the paid collections. You can always write in and dispute the derogatory information later. With any luck, it'll go unverified. If you've already paid, depending on how big and how professional the firm who collected was, they may or may not care enough to verify, resulting in the information being erased. But that's something that can take months or years of repeatedly contesting, assuming it ends up working at all, which is why a lot of people will spare themselves the trouble hire a credit repair service that will contest all that derogatory information for them on a regular basis.

In the meantime, look into secured credit cards. They're kind of a **** deal as you're essentially borrowing against yourself (you give them the money for your credit limit upfront), but it's an easy way to start building. Maintain something like 10% - 15% of a balance (credit agencies like to see *some* credit utilization).

Also, there are typically a lot of non-profits around that you can personally speak to with credit advice. I'd pull some google-fu and see if you can get some more finely tailored help.

Thanks u both I really appreciate both of your responses. I'm already aware of much u both said. I'm asking specifically about my doctors bill which was sent to collections but still showing in my Dr's database. My question is, should I be handling this with my doctors office directly and dealing with the creditor after the bill has been settled. Or settle the bill with the collection agency since they purchased the debt from my doctors office? Thanks again any advice is greatly appreciated. And I will check into the non profits you mentioned, for some reason I am skeptical about them because I am unfamiliar with how they work.

Are you sure you even have a choice? Generally speaking, once an account's been sold, you're stuck with the collector. But I don't know what kind of agreement the hospital has or if there are any state laws that are friendly toward the consumer when it comes to medical debt. Ask the office at the hospital if there's anything they can offer to help you out and get rid of the derogatory information in exchange for full payment. Regardless, I'd think it best to pay directly through the hospital if given the choice.

Are you sure you even have a choice? Generally speaking, once an account's been sold, you're stuck with the collector. But I don't know what kind of agreement the hospital has or if there are any state laws that are friendly toward the consumer when it comes to medical debt. Ask the office at the hospital if there's anything they can offer to help you out and get rid of the derogatory information in exchange for full payment. Regardless, I'd think it best to pay directly through the hospital if given the choice.

See, that's what I thought as well. And it's actually with my primary care physicians office, not a hospital. But I was notified insurance didn't cover several of my visits 100% which were sent to collections. I had a recent visit, so a couple days later I called to see what was my responsibility and they had told me the full amount. I was expecting to be told a balance just from the last visit so I was caught off guard. I said "Oh. Ok. So if I pay you that amount, I don't have to pay the creditor, correct? " and the receptionist informed me "No. " I wish I had handled it better but like I said I was caught off guard to be told the balance including what was sent to collections. Obviously I don't owe both. I think I will call my doctors office tomorrow with the questions that have arose. And I agree with you that paying them directly is probably best. But I want to do what's best for my credit score. Thanks again for your response

And if you don't mind elaborating on the non profit agencies. As I've said I'm skeptical regarding them as I am unfamiliar with how they work but how do you find a reputable one. I guess my fear is it ending up to be a scam

I work with Green Path (formerly Consumer Credit Counseling Service). They are in the US. With their help I was able to negotiate a much lower interest rate and a lump sum to the agency rather than three payments to three creditors. I ended up paying just over $250 per month rather than the $550 per month I had been paying.

I'm proud to say that I have brought my debt from over $20k US (I know...) to just under $4k. I will be debt free by this time next year.

You can call the agencies yourself to attempt to negotiate a settlement (one place brought the amount I owed down from $300 to $70) or you can call a non-profit agency.

My credit score went from the mid-500s to the high 600s. Now I can get decent rates on car loans and I pay zero deposit when I rent apartments (I move frequently).

Hope some of this helps.

Well, your credit score is only important if you're looking for more loans. I have no idea what my credit score is and I don't care, because everything is paid off and it doesn't matter to me.

This is the best philosophy. I can't wait for the day I have a 0 credit score. Credit score = I love debt score.

As far as the medical bills go just work with the collectors, you could probably settle for less than you owe. Save up some money, offer it to them, keep offering until they accept. Get an agreement in writing before sending any money and do not give them access to any of your accounts. Send a cashier's check or something.

Yeah, if the doctor's office sent it to the collectors, they've sold off the debt. The nurses don't know what they're talking about. They can't collect twice on a debt. Usually the first round debt is sold off for 10% to 40%. So offer them $200 and let them negotiate you up. If you don't reach an agreement, hang up and call back in a few weeks.

This is the best philosophy. I can't wait for the day I have a 0 credit score. Credit score = I love debt score.

 

As far as the medical bills go just work with the collectors, you could probably settle for less than you owe. Save up some money, offer it to them, keep offering until they accept. Get an agreement in writing before sending any money and do not give them access to any of your accounts. Send a cashier's check or something.

Saying credit score doesn’t matter is fundamentally flawed, at least in the US.

Credit score impacts EVERYTHING - down to pre employment background checks or getting set up for internet at your rental apartment.

Credit scores are a reflection of fiscal responsibility. My credit score being good doesn’t mean I love debt. It means I manage credit well.

Pay off your debt. Even if you have to only make arrangements for $50 a month. Then when you can, go to the local credit union and get a secured credit card. But your credit score *will* go up when collections fall off your report.

And i agree with Mustlovesdogs -- I had to have my credit run when i applied to work at an electronics store. I believe some employers in the finance world do it as well. If you can get your credit score at least up in the 600's it will make a big difference. When you are there, you can go to your bank and get a card that accumulates cash back just to have for emergencies and things like buying plane tickets or making reservations to shield your bank account.

I would love to be able to buy a house for cash but I don't have $200k in my back pocket. So credit is necessary for me.

Saying credit score doesn’t matter is fundamentally flawed, at least in the US.

 

Credit score impacts EVERYTHING - down to pre employment background checks or getting set up for internet at your rental apartment.

 

Credit scores are a reflection of fiscal responsibility. My credit score being good doesn’t mean I love debt. It means I manage credit well.

Agree completely.

It's not only about loans. It's about renting an apartment. And yes, most importantly, background checks for employment.

Look, you should be applauded for wanting to clean up your debt and improve your score.

When I was in my 20's, I racked up quite the debt, and I, too, had debt collectors calling me. At work, how embarrassing. I went through some very similar stuff as you, and I eventually cleaned it up.

I cut up all my cards except one, and I use that one for everything, even to this day. Keeps it clean for me.

You've been given great advice by others here who are in the credit industry, and I'd consider their advice a gift and re-read and use it.