A car accident won’t directly affect your credit score, regardless of who is at fault. However, the debts you may incur from a car accident can affect your credit score down the line. Read about what impacts your credit score after a car accident, and how hiring a car accident attorney can help.
What Factors Into My Credit Score?
According to Experian, a well-known credit reporting agency, your credit score is determined through a combination of the following factors:
- Your payment history: any missed payment on rent, mortgages, insurance bills, car loans, and more could negatively impact your credit score.
- Your credit usage: how much of your available credit (that is, the credit limit on your credit cards) you are using.
- How long you’ve used credit.
- The variety of credit accounts you have: this may include credit cards, student loans, car loans, mortgages, and more.
- Any new credit accounts you’ve recently opened.
Since car accidents are not directly debt-related incidents, they aren’t reported to credit bureaus. Even a person who causes a car accident will not see a direct hit to their credit score.
So How Can a Car Accident Affect My Credit Score?
Unfortunately, car accidents can take a hefty toll on a victim’s wallet—and the financial fallout from a car accident could affect your credit score down the road.
Missed Payments Due to Financial Hardship After a Car Accident
An accident can put a victim out of work, leading to weeks or months of lost income. This unexpected financial distress could make it difficult to pay bills on time, causing a hit to your credit report.
In addition, a car accident can increase your expenses. Depending on the circumstances of the accident, you may need to pay for car repairs or purchase a new vehicle. If you miss payments or rely too much on credit cards, your credit score may take a dive.
Medical Bills After a Car Accident
If you are injured in the crash, you will need medical treatment. Unfortunately, this can become very costly.
Even if the crash wasn’t your fault, the medical professionals who provide immediate assistance will require compensation for their services. Without an attorney, you’ll need to pay these bills either out of pocket or through your health or vehicle insurance.
If these bills don’t get paid, the doctor or hospital could send them to collections. A debt in collections will have a strong negative impact on your credit score. Not only will your credit report show missed payments, but it will also show you’ve been sent to a collection agency to recover payment.
Medical Bills In Collections After a Car Accident Won’t Affect Your Credit Score Right Away
Thankfully, credit reporting agencies have recently made changes that benefit consumers with medical debt. On July 1, 2022, the time period before unpaid medical debt appears on a patient’s credit report increased from six months to one year. So if you have unpaid medical bills after a car accident that are sent to collections, these debts will not affect your credit score for one year.
In addition, once medical debt in collections is paid, it will not be included in your credit report. These new regulations give consumers with medical bills in collections a one-year window to work with insurance, medical providers, and attorneys to get the debt paid.
Though this one-year grace period is extremely helpful, the best situation is one where medical debt never reaches collections. After a car accident, it’s crucial to hire an attorney right away so that an experienced team can help negotiate your bills on your behalf.
What Can I Do to Protect My Credit Score After a Car Accident?
The best way to protect your rights, your credit, and your well-being after a car accident in California is to call PARRIS Law Firm as soon as possible.
First and foremost: you will need medical treatment after your accident. We can work with your healthcare providers to ensure you get the complete care you need at the most favorable rate.
Sometimes, we’ll negotiate a medical lien: an agreement in which your healthcare provider agrees to treat your injuries immediately and accept payment after you receive a settlement or verdict. You can learn more about how we negotiate medical bills on your behalf in our blog article.
We sometimes work with auto repair shops and your car insurance company on billing arrangements, ensuring that you will not be liable for payments while you wait for a favorable result from your attorneys.
Your legal team at PARRIS fights for your interests alone, and we won’t stop until you see the maximum recovery possible.
Don’t let someone else’s negligence put your financial well-being at risk. Contact PARRIS today to schedule your free consultation with our experienced team.