Right now, any medical debt will be calculated into your credit score similar to that of other debts owed. A recent report made by the National Consumer Law Center is saying that medical debts should not be included in your credit history at all. Their argument is that medical debts are not a good indicator when predicting other debts or ability to make payments. Medical bills and debts are often not planned, unlike other debts that are initiated by the consumer.
FICO has decided to downplay the role that medical debt plays into your credit score. Medical expenses and debt reaches so many, in fact in 2012, 22% of adults were contacted about debt owed on medical bills. Therefore, this change in the credit score formula is great news for consumers everywhere.
Find out what your credit score is and what it means. You are entitled to one free credit report annually. It is extremely important that you take advantage of viewing you credit report every year to check for errors and mistakes that can have a negative effect on both your score and financial health. Contact Francis Mailman Soumilas, P.C. to help clear your record of mistakes and errors.
Medical Debts and Errors
On top of the inability for medical debt to determine how well a consumer can pay off loans or bills, many medical debts are due to errors or miscommunication between the consumer and the insurance companies. Human error, confusing bills and language, and inconsistencies are the cause of many medical bills going unpaid. And these errors should not be reflected on your credit history or calculated within your credit score, later affecting your ability to receive a loan or credit.
You should clear up any errors that are listed on your credit report immediately. Not doing so, could result in higher loan rates and denials for credit. Find out how you can clean up your credit report of errors with the help of a dedicated team of lawyers.
In the future, you should notice that any medical debts will not have as big an impact on your credit score as it has in the past. And as more research come in, you may see a change down the road that will eliminate it completely from the formula.