Here's an added challenge if you're struggling to pay a medical bill: Your credit can be wrecked if the doctor or hospital kicks your unpaid bill to a collection agency.
And your credit can remain ruined even after you've paid the bill.
A growing number of Americans are discovering this unexpected land mine. The Commonwealth Fund estimates that 30 million people were contacted by collection agencies for unpaid medical bills in 2010.
People with wrecked credit scores include those who were just trying to resolve a dispute with their insurer. It includes people owing less than $250. The record of the collection action can stay on a credit report for up to seven years.
That can drag down a credit score and drive up the cost of financing a home.
When a debt collector goes after you for a late medical bill, your credit can suffer - even if you quickly pay up.
Paid or unpaid, large or small amounts - all can affect a credit score, said Anthony Sprauve, a spokesman for FICO, developer of the most widely used measure of credit risk. Banks and credit card companies use FICO and other credit scores to decide if they'll lend to you and how much you'll have to pay to borrow money.
The effect on a credit score can vary, but for any medical collection - paid or unpaid - "a person with a FICO score of 680 will see their score drop between 45 and 65 points. Someone with a FICO score of 780 will see their score drop between 105-125 points," Sprauve said.
Your credit score is determined by information in your credit report, which you can check for accuracy. Federal law says everyone is entitled to one free credit report per year from each of the three major credit reporting companies - TransUnion, Equifax and Experian.
The government-approved site www.annualcreditreport.com tells how to request a free copy of your credit report.
If you find a mistake in your credit report, you can dispute the error with the credit reporting company. The Federal Trade Commission has steps for disputing errors, including a sample dispute letter, on its website.
But if the bill wasn't a mistake, there's not much you can do once it goes to a collection agency and it's reported to a credit bureau, experts say. In some cases, its impact on your score will decrease over time and, after seven years, the record of the collection will be taken off your credit report and your score should rise accordingly.
Consumers can dispute whether they were properly notified of a bill, but that's tough to prove, said Mark Rukavina, director of the Access Project, a nonprofit that gets some funding by supporters of tougher laws on medical debt collections.
It's theoretically possible to get a collection agent to delete an account from a credit report once the bill is paid, but it's very difficult, Rukavina said.
And take care. Disputing something on your credit report can delay the process of getting a home loan. That could potentially cost you when low interest rates are available for a limited time or if there's a closing deadline on a property.
Online:
How to dispute credit report errors: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm
Free annual credit report: http://www.annualcreditreport.com