Are you receiving a constant stream of phone calls? Demanding letters? Have you discovered Medicredit collections on your credit reports? If so, you’re in the right place.
Medicredit is a large, aggressive, third-party debt collector. They service debt nationwide and are based out of St. Louis, Missouri. They work exclusively servicing medical bill collections, as in hospitals, doctor’s offices, healthcare providers.
The first item we need to share is the Fair Debt Collection Practices Act (FDCPA). This is federal legislation intended to regulate the debt collection industry, and protect you from aggressive collection agencies. It’s worth reviewing in detail, at your convenience.
In short, it requires debt collectors to be honest, straightforward, and not be deceptive. It further says they’re required to give you that modicum of respect and dignity that all human beings deserve. And yes, this legislation is broken about as often as our drug laws in this country.
Will Paying Off Medicredit Collections Help Credit?
When most folks discover they have a debt in collections, their first concern is will paying off collections help credit? It makes sense. And you’d think it would, right? Sure seems like it should.
If all you do is pay off collections, and nothing more, it won’t. You see, the only thing that happens when you pay off collections is a change in the status of the item on your credit reports. It’ll be changed to a paid collection.
This is still a negative, damaging, and derogatory item to have on your credit reports. And it’s virtually guaranteed to cause a low credit score. Anthony Sprauve, a spokesman for FICO, says collections on your credit reports can damage and drag your score down by as much as 100 points.
Look, the key to improve your credit score is to remove this item from your credit reports. These dings, blemishes, and negative marks are the cause of a poor credit score. These negative items are the true credit score killers.
That said, for some folks after first performing the necessary due diligence and following the four tips in this article, may discover paying off collections is the easiest way to clean up credit report dings, and remove this negative information. We need to first share, the debt collection weapons available to Medicredit.
Debt Collection Weapons
In addition, to the avalanche of phone calls, threatening letters, Medicredit is also going to report negative information on your credit reports. They can also legally inflate your total balance by adding interest fees, and even collection fees.
If they’re unable to collect payment, they have two options. First, they can sell the rights to your account, to yet another debt collector. This new collection agency will begin calling you, sending letters, and they’ll report even more negative information on your credit reports.
The second option, and according to consumer reports this looks like the more likely choice, is they’ll sue you in a civil court. Their goal is to win a judgement against you, because then they’ve really got you by the short and curlies.
They can potentially garnish your wages, place liens against you and or your property, and even asset seizure. Naturally, for full details, check out your local legislation because each state has unique laws. Worst of all, a judgement on credit report files, will annihilate your credit score.
3 Cityplace Drive Suite 690
St. Louis, MO 63141
4 Consumer Tips For Medicredit Collections
1. Request Debt Validation
Let’s now discuss how to deal with debt collectors, and the very first step for all consumers dealing with every collection agency, is to request debt validation. This is your right, granted by the FDCPA.
Essentially we’re saying prove this is a legit debt, my account, and everything’s on the up and up. It’s most effective to make your request in writing, and send it using certified mail, with return receipt requested. This way you’ll have evidence they received your validation request.
They’re required to respond within 30 days of receipt by providing you with the documents, paperwork, and evidence proving this is your debt. This paperwork will also show you all the details regarding the account such as who the original creditor or medical provider was, the dates of activity, the total balance, etc.
If they fail to validate your debt, then in compliance with the FDCPA, the debt is legally forgiven. As in you’re no longer legally responsible for payment. Further, they’re supposed to contact all three credit bureaus to have them remove collections from credit report files, regarding this account.
2. How Old Is The Debt?
We’re talking here, specifically about the statute of limitations. This is state law, and for exact details, you’ll need to check your local legislation. This state law, says exactly how long you’re legally responsible for repayment of a debt.
Typically, it’s about seven years from the first date of delinquency. Once this time window runs out, then in compliance with the statute of limitations, you’re legal obligation to repay, has also run out. You’re not legally responsible for repayment, forever.
If your account is validated, it’s vital to review this paperwork you receive because we need to find the dates of last activity on your account. And then we need to check and make sure you debt is still within the statute of limitations.
This applies to most types of consumer debts including medical collections, charge off accounts, utilities, telecommunications, credit cards, and many more. The few exemptions are federal income tax, and defaulted federal student loans.
Warning. One of the dirty debt collection industry tactics is to re-age consumer accounts. This is often done illegally, and the takeaway is it’s naive to believe any collection agencies are sitting around waiting to forgive our debts.
3. Negotiate a Settlement Agreement
Let’s not talk about how to negotiate with debt collectors, and it’s essential to only enter into negotiations directly with Medicredit after your account has been validated, and you’ve checked the statute of limitations time window. Assuming everything’s legit, we’ll next need to negotiate a settlement agreement with Medicredit directly.
There’s two parts to your agreement. First, always negotiate to settle your debt for less than the total balance due. Frequently, you’ll be able to settle for as little as 15% up to about 45% of the balance. For example, with a $1,000 debt you may be able to settle for just 25% or $250.
The second part of your agreement is mission critical. We must get Medicredit to agree that in exchange for our payment, they’ll stop reporting our account information to all three credit bureaus.
If we overlook, this part of the agreement, once we make payment, we’ll get stuck with that paid collection on our credit reports. It’s wise to get this agreement in writing.
We also need to share here, the popular and unfortunately forsaken belief in the pay for delete approach of dealing with collection agencies. If you’re unfamiliar this is where you demand Medicredit first delete the item from your credit reports, and then you’ll make payment.
As wonderful as this sounds, it’s about as practical as free healthcare for all. It’s wishful thinking. It’s the theories that college professors spew, that have no real-world or real-life application. You’re welcome to try this approach.
In our decade plus of working on the front-lines with folks fixing credit, we’ve yet to hear of one instance where this has happened. And for those familiar with the credit and debt systems in our country, it’s not practical, and is about as realistic as Jolly Saint Nick visiting every house on Christmas Eve.
They will agree to stop reporting your account information. They may put up a little fight, and they may agree to it immediately. But, they’ll never agree to first delete the item, especially on the promise that you’ll make payment, unfortunately. It’d be great if they would, but we wouldn’t advise holding your breath.
4. Remove Medicredit Collections From Credit Reports
In this final step, we’re looking at how to dispute items on credit report files, because this is how we’re going to remove the Medicredit collection item. We’re going to exercise more of your consumer rights, and specifically those granted by the Fair Credit Reporting Act (FCRA).
This federal legislation enables us to challenge and dispute any item on our credit reports, so long as we believe that item is incorrect, misleading, or made in error. Yes, we’re going to dispute the Medicredit collection item on your credit reports.
There’s three ways to dispute credit report items: online, over the phone, and by mail. Once the credit bureaus get your dispute, and they first have to deem it valid, which is another conversation for another place and time. So make sure to sign up for our free newsletter for more credit score help with Dan Willis, and join our congregation.
Once the credit bureaus get your dispute and find it valid, they’re required to investigate the item. They’ll call it a re-investigation, nevertheless, they’ll contact Medicredit for verification of your account, and the relevant information.
As per your settlement agreement, Medicredit won’t verify your account, during the credit bureau’s investigation. In compliance with the FCRA, this means the credit bureaus must remove this item from your credit reports. This is how to clean credit report dings, blemishes, and remove negative items, and do so legally.
Listen, you’re going to have to get tough and gain the knowledge of our continuously evolving credit and debt laws in this country. If you’re going to deal with this challenging situation yourself. Medicredit, and every debt collectors top priority is separating you from your money.
If you’re working to improve credit, an appropriate analogy is your credit score is a lot like your Grade Point Average (GPA) in glory school days bygone. It doesn’t matter if you’re acing all your classes, if you’re failing The Art of Walking, because this negative mark is going to ruin your overall GPA.
This also applies to your credit score. And this is why it’s so essential to clear credit report dings, blemishes, and remove the negative items. We encourage our members to consider professional, legal, and legitimate credit repair companies to help.
Because in 2016 alone, over 9 million negative items were removed from consumer’s credit reports. One of the best credit repair firms is the Credit Pros. They’ve helped client’s successfully remove collections, late payments, charge offs, judgements, liens, and so many more negative credit report items.
Get a free credit consultation with a certified FICO professional by calling toll-free 1-877-418-7596. And for more tips, techniques, and strategies about how to fix my credit score with Dan Willis, sign up for our free newsletter and join our congregation.
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