Medical Debt Wreaks Havoc on Consumers’ Credit Reports

Medical Debt Wreaks Havoc on Consumers’ Credit Reports The Consumer Financial Protection Bureau (CFPB) released a report that reveals that over 1 in 5 consumers, or 43 million, have black marks on their credit reports for medical debts, and that medical debts constitute over half of debt collection items on credit reports. Chi Chi Wu of the National Consumer Law Center said “This report is another example of the powerful information revealed by CFPB’s groundbreaking research.” Medical debt is different from other types of consumer debt. Medical debt is unique because the most vulnerable patients – the uninsured and underinsured...

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Medical Debt is Causing Big Problems for Consumers

Medical Debt is Causing Big Problems for Consumers Medical debt is causing big problems for huge numbers of consumers. The New York Time reports that medical providers and their debt collectors are unfairly hitting consumers with reports to the credit bureaus they have have not paid medical debts. One seemingly simple medical procedure may result in an avalanche of bills from hospitals, insurance companies and doctors. The bills themselves are often confusing as to what the consumer is supposed to pay and how long the consumer has to pay. Some medical providers charge huge amounts for simple procedures. Hospitals routinely...

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VantageScore Ignores Paid Collection Accounts

The NY Times reports that a major credit score generator, VantageScore Solutions, has decided to ignore collection actions on credit reports — many of which are medical debts — as long as the collections are paid. Vantage found that paid collections are less accurate at predicting future defaults than looking at unpaid collections and other factors. VantageScore’s findings lend support to proposed legislation that was reintroduced in Congress this year to require consumer reporting agencies to remove fully paid or settled medical debt information from consumers’ credit reports. That would help some of the estimated seven million people who reported...

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Medical Errors Trip up Consumers Trying to Refinance

Today, the WSJ reports that consumer’s medical bills, even disputed ones, are hurting their credit scores. One example is a woman in Texas had two erroneous $11 doctor bills on her credit reports that stopped her from refinancing her home. The bills had been sent to a collection agency. Her credit score dropped from 757 to 680. The lender said she would have to pay an additional $14,000 to get a 5.5% interest rate. A mortgage bank calls medical debt the single biggest roadblock for would-be refinancers. “People have no idea that they still owe small amounts which later end...

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