Although Interest Rates Plunge, Credit Reporting System Prevents Many Borrowers From Seizing Opp... (ician relationship tothe detriment of th...)

Although Interest Rates Plunge, Credit Reporting System Prevents Many Borrowers From Seizing Opportunities

Date:12/8/2008

ician relationship, to the detriment of the health of the patient," says Texas-based cardiologist Fred Maese, MD, FACC. "The way the system is set up, there's no incentive for patients to settle their accounts quickly. Once the collection account hits the patient's credit report, that consumer is held hostage for up to seven years, whether they settle the account or not."

"Based on our extensive research, we can surmise that nearly half of Americans have at least one medical collection debt that's lowering their credit score," says Anderson, who uses analytical software to evaluate credit reports and determine how borrowers can best improve their own credit scores. In doing so, he found that medical collection accounts are routinely reducing borrowers' credit scores by 60 to 100 points or more. "This is disastrous news for loan applicants, especially since earlier this year Fannie Mae and Freddie Mac started requiring higher credit scores to qualify for loans, and loan servicers of FHA and VA loans have implemented additional credit score-based premiums," he adds.

Anderson, a vocal advocate and educator in the credit arena, has initiated a petition to create a federal law mandating the permanent removal of a paid or settled medical collection account from the consumer's credit report within 30 days of settlement.

"I've seen many hard working, conscientious individuals who diligently address their monthly obligations, but because they unwittingly incurred a medical collection account, are forced to settle for a mortgage rate that's half a percent higher than if they'd never had that collection account," adds Anderson. "That half point can translate into thousands of dollars in wasted money, and that's only for a home loan. They can also expect higher rates for auto financing, credit cards and insurance. That's a hard pill to swallow for the many individuals who were never notified of the initial billin
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Although Interest Rates Plunge, Credit Reporting System Prevents Many Borrowers From Seizing Opp...(ician relationship tothe detriment of th...),Health