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PHYSICIAN FINANCING RX: How a Dose of Debt Consolidation Can Help Heal a Doctor’s Credit

As Chief Credit Officer at Bankers Healthcare Group, I’ve spent over a decade analyzing the financing needs and behaviors of healthcare professionals.

Based on that experience, I know that combining multiple high-interest debts into single loans not only helps doctors improve their credit scores. Selecting the right program at the right point in your career can actually position you for tremendous growth.


Yet before I share that, below are some eye-opening opportunities that debt consolidation can help deliver.

The BHG Debt-Consolidation for Doctors Checklist

Increase Your Credit Score through Debt Consolidation

At the 2019 TransUnion Financial Services Summit in Chicago, the credit-reporting agency shared that the majority of consumers (or 68 percent) who consolidated debt saw a credit-score increase of more than 20 points by the end of the subsequent quarter.1

That is a remarkable return on the investment of your time to consolidate your debt.

Lower Your Costs for Future Borrowing

TransUnion found that “many debt consolidators appear to be preparing to take out a new mortgage.”

This really makes sense for doctors. As they progress in their careers, a doctor may need to purchase revenue management software, renovate exam rooms, install cutting-edge medical equipment. Then there are personal expenditures.  

Prior to making such investments, it makes sense to consolidate debt, to improve your financial health, increase your credit score, and lower your borrowing costs.       

Heal Your Credit By Paying Off Debts

Today, 46 percent of physicians ages 35-49 are still paying off medical-school debt, carrying an average of $190,000.2

That’s a long time to be paying down a loan. Then you add other types of unsecured debt, such as credit cards, and financial obligations, and understandably all that complexity may result in missed payments. Consolidating debt helps you simplify your bill payment, reducing the chance you’ll miss a payment. Consistently paying on time will help improve your credit standing.

Make Debt Management Less Stressful

As a doctor, you’re busy enough. Merging multiple debts into a single monthly payment means you won’t have different due dates and minimums, reducing the likelihood of missed payments. This simplicity will help you improve your credit history, and lower your stress. In fact, TransUnion reported:

  • The impact of consolidation on borrower scores appeared to persist a year later.
  • Debt consolidators showed fewer past due accounts in the year following consolidation.
  • Consumers who consolidate their debt perform better not just on personal loans but also on debt in their wallets.

Decrease Your Credit Utilization Ratio

Credit utilization, or the ratio of your credit balances versus the combined credit limit across all of your revolving accounts, represents up to 30 percent of your FICO Credit Score. Consolidating debt helps speed the time to pay down outstanding debt, eliminates some finance charges from separate balances, and eliminates multiple balances from different lenders. The cumulative effect is a lower utilization ratio that lenders prefer. (I recommend a target utilization ratio of 30 percent or less.) 

Improve Your Payment History

Though not a short-term remedy, the convenience of consolidating debt into a single payment can help you improve your payment history. After all, the single biggest factor in your credit score is always your payment history.

THE CATCH: The Debt Consolidation Cure Can Be Worse than the Disease

Actually, there are multiple catches.

In theory, combining multiple debts into a single monthly loan payment makes sense, right? Not necessarily, especially for a doctor.

When you apply for a loan at a bank or an online lender (not Bankers Healthcare Group) they will usually perform what is known as a “Hard Credit Pull,” a formal request to check your credit report to determine your quality as a borrower. New credit inquiries will lower your credit score. (Bankers Healthcare Group only performs “Soft Credit Inquiries” that do not affect the credit scores of our borrowers).

Then, let’s say you take out a debt-consolidation loan with a variable rate. Or, let’s say the lender cannot lend you enough money to cover all of your debt. Even worse, let’ say that lender requires you to pay back the loan in less time than you’d prefer, resulting in higher monthly payments than you can really handle.   

And by the way, many lenders will ask you to itemize exactly how you plan to use their money. Some will pay the accounts directly, to ensure the consolidation takes place.

As I said, debt consolidation is different for doctors, and those are the reasons why.

If your lender doesn’t understand your needs, or doesn’t specialize in financing for healthcare professionals, don’t be surprised if you get stuck in a bad situation. 

After all, when it comes to doctors, isn’t specialization important?


As Chief Credit Officer at Bankers Healthcare Group, April Brissette leads the credit team and their loan decisions on approximately 3,500 applications per month. April has dedicated her career to helping healthcare professionals with their financing needs.

To discuss this article and speak with a specialist, please contact us today!

Sources for Data and Research in this Article

1: Source: “Debt Consolidations and Its Impact,” TransUnion, 2019

2. Source: “2018 Physician Compensation Report,” Medscape, WebMD, 2018