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 up on their credit report.”
Some 14 million Americans have errors on their credit report because of medical collections, according to a nonprofit mentioned in the article.
A bill in Congress would provide relief for homeowners with medical-debt troubles. The Medical Debt Relief Act, which passed the House this fall and is now in the Senate, would remove settled medical debt from credit reports after 45 days, instead of the customary seven years.
Such stories are all the more reason consumers should check their credit reports and promptly dispute any inaccuracies by writing to the credit reporting agencies.