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Why Medical Insurance Hurts Your Credit Score

By Ruth Racey
Published: Friday, March 12th, 2010

The basic reason why you would want to have insurance is because of the fact that you would like to have protection and security. This is especially important with regards to getting medical insurance. Remember that there are always chances that you may be a victim of illnesses or accidents, in which you may not have control whatsoever. You may know that definitely, you will encounter illnesses or accidents, but will never know when or how until it is done. Therefore, getting medical insurance actually helps. Well, not always. Sad to say, having medical insurance may actually harm your credit score. Try to take a look at the reasons why.  

  • There are instances wherein your insurer fails to pay for all of your claims
    Remember that there are certain specific policies that insurance companies have whenever they are going to pay for the bills that you have incurred while in the hospital. In this case, the sad fact is, there are specific instances wherein your insurance coverage actually fails to cover your situation. In this case, you may think that your insurance company are already paying your bills, while in fact they are not. This will surely rack up debts in your credit card account, ruining your credit score.
    Adding to this situation, surely whole you are sick, it is very difficult to go through all of your medical bills. Especially when you have sustained a major damage, you will rather focus on getting well than caring for all the medical bills that you have incurred. In this case, you will very likely choose to set it aside and let your medical insurance company handle it. The sad fact is, whenever your insurance company fails to handle it, you would only face accumulated bills and a low credit score. 
  • Incorrect data entry
    In addition, there are certain insurance policies that require a specific kind of accident or any other medical condition that must be experienced before insurance holders are able to claim. 

In this case, whenever thee medical staff have input wrong data, and will not fit into the requirements of the insurance company, surely, they will likewise fail to answer for paying your bills. This situation will only lead you to have racked up bills, which will in turn surely drag down your credit score. In this case, when you want to have your credit score not hurt by your medical insurance, always choose the right medical insurance company.

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