Question about how credit report works?

Question

i dont much about how credit works and i have a few doctor bills on my report that i cant pay off.

any way one friend told me that all things that are put on ur credit report can ever do is ruin ur credit, and in a certain amount of years drops of ur report and u dont owe it any more.

another friend said that things stay on ur report until u pay it off and if u dont pay it within so many years then u get get arrested and taken to court.i have never recieved a credit report so i dont even know of everything that is on it.

how does this stuff really work? thanx 4 ur help :)

Answer 1

Unfortunately Simpleliving is only 1/2 right.   She is dead on the money that you should pull your credit report and see where you actually stand ... knowledge is power.   Once every year you can get a free copy of your credit report from all three of the credit bureaus (Transunion, Equifax, Experian).   Make sure you get your report from ALL THREE ... as sometimes they have different information and sometimes the information can have errors.

Now where simple was wrong.  Unless you declare bankruptcy, as long as you owe the money ... they can keep on trying to get it from you.  While it is true that negative data will fall off your credit report after 7 years ... if you still owe the money, they can keep on hitting your credit report over and over again and it becomes a new claim that will last another 7 years.   The only way to make it go away is pay off the debt or declare bankruptcy.   BUT ... as Simple said ... the best course of action is to contact the collection agency and try to work out a payment plan or a settlement to get it resolved.  They may even agree to remove the negative info. from your credit report.   Gut instinct is that your doctor's office won't be able to help you ... once it's gone to collections, they don't have much say anymore.

Now ... they can go to court and sue you to garnish your wages (get money from your boss out of your paycheck) or seize any money in your bank account and technically they CAN have you arrested ... it is a crime to not pay your debts ... BUT as long as you are working with them they probably will not waste time going to court and it would be EXTREMELY rare for them to have you arrested, so don't worry about that too much.

Three things you must do ASAP:

1.  Get a copy of all three credit reports so you know where you stand.

2.  Contact any creditors or collection agencies and state that  you want to work out a payment plan.

3.  Read, Listen, or call Dave Ramsey .... he can really help!

Good Luck.

Answer 2

You should try to negotiate with the doctor's offices to see if they will lower the amount you owe and then try to pay it off.  It can take up to 7 years for something to fall off your credit report, so it's not worth not paying.  But they can't take you to jail or anything like that.  You can go to https://www.annualcreditreport.com/cra/i... to get a free credit report once a year.  You should check your report to see what's on there.

Answer 3

Owing a debt and what's on your credit report are two different things.

Medical Collections will show up on your credit report for 7 years (paid or unpaid). They may even show up a few times, killing your credit even more.

Falling off your credit report doesn't mean you dont owe it still. The company can sue you and be granted a judgment for as long as the Statute of Limitations for Written Contracts (SOL) is in your state. You can google this. In OH, KY its 15 years! In CA its only 4-6 years I believe.

If your SOL is long, try to settle the debt and pay 50% as payment in full.  If your SOL is up, you can't be sued and just forget about it and wait for it to fall off your report. Or hire a company to remove it. see www.clearcreditcorp.com. there is a lot of info here also about how credit works.

Answer 4

Credit reports and amount owed are two different things.  First, a credit report has both good and bad information in it.  If you pay your bills on time, you get good ratings.  If you are late, your ratings decline.  By law, you are entitled to receive a copy of your credit reports once a year (there are three credit reporting agencies).

Good credit ratings are invaluable - many places won't give you credit unless you have a good credit rating, so in that instance, having no credit is not good.

Your debts are your debts...However, all states do have a statute of limitations on them.  Check with your state's Attorney General to find out what the limitation is in your state.  Having said that, in most instances (not all), a bad debt will stay on your record for up to 7 years.  Remember, this is different from the statute of limitations...you may be in a state were the limitation is longer then seven years, so just because it doesn't show on your credit report doesn't mean you don't still own it.

And for what it's worth, most statute of limitations begin all over again if you make a small payment, which is why debt collectors will try to get you to make any payment at all, even 50 cents or a dollar.  Most bad debts get sold to debt collectors rather then going to court, unless it is a large debt like a car or house - which tend to get foreclosed or repossessed.