Question: I have a medical bill that a hospital hired NCO Financial to collect. The balance is on my credit report under NCO Financial, which has been reporting negatively since November. I recently sent a pay for delete letter to NCO after a phone conversation didn't generate a positive result. Today I learned the hospital still owns the debt. Should I send a pay for delete letter to the hospital as well? If I work with the hospital, how do I get the NCO entries deleted?
Answer: A pay for delete letter can be sent directly to the original creditor. But there is no guarantee it will be accepted. When original creditors or debt collectors agree to delete a negative item from your credit report in exchange for payment; it is strictly voluntary as there are no rules or laws that dictate such agreements must be accepted.
Since the hospital still owns the debt they may be willing to accept payment in exchange for a deletion. It would be preferable to deal with the hospital as long as you can get to the right decision maker. You may have to request a supervisor, manager or director in the billing office. Often, the customer service representative answering calls may not be in the position to make a pay for deletion agreement.
Although I do not suggest you speak over the telephone with a debt collector, a hospital billing office is different. Speaking directly with the hospital first, at least to see who to send the letter to, may be the best plan of action.
If the hospital agrees to a pay for delete it essentially means they will contact the collection agency and pull back the bill. If they agree to a direct payment, they will then instruct the collection agency to delete the listing. Just make sure you remind the billing office to have the collection agency DELETE the negative listing and not update the collection account to “paid” status.
The truth about collection accounts is that paid collection accounts will not produce a dramatic change in your credit scores. The fact is collection accounts hurt your credit scores and that’s generally true whether they are paid or unpaid; unless a lender is using a credit scoring model that favors paid collection accounts.
The problem is most banks, mortgage lenders and credit card companies use older FICO credit scoring models when evaluating applications and with these older scoring models; paid collections can still hurt your credit score.
Medical providers, doctors and hospitals generally do not report medical bills to the credit bureaus. Typically the only way medical bills end up on credit reports is when they are outsourced to third-party collection agencies or sold to a debt collector. But, the billing office has the power to instruct the collection agency to remove their negative notation from your credit reports.
Preferably all negotiations should be done in writing even if you make an agreement over the telephone. You can request the billing office send you letter confirming the agreement. The confirmation letter will be your proof in case the collection agency does not follow through to instruct the credit bureaus to remove the negative item. The best of luck to you.