My Credit Plan BlogLatest News and Updateshttps://mycreditplan.org/BlogYet to be Seen if Biden Can Remove Medical Collections from Credit Reportshttps://mycreditplan.org/Blog/PostId/131/yet-to-be-seen-if-biden-can-remove-medical-collections-from-credit-reportsGeneralFri, 29 Sep 2023 23:38:34 GMT<p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none">The Biden administration is trying to eliminate medical debt from your credit report. Is it true? There are many players in this and it will yet to be determined if that will be true. What will happen to the medical service providers? Will they be willing to provide services and not have an avenue to collect payment? That is a very good question. </span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none">The U.S. government first allowed consumers to miss payments on various types of loans without those missed payments showing up on their credit reports. The next phase removed most past due taxes and any judgments from the credit report. Now, the Biden administration wants to remove all medical collections form the credit report. There will be a fight on this one and it will create additional secondary consequences. </span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><font color="#000000" face="Calibri, sans-serif" size="3">Hospitals, doctors and other medical providers are not going to just allow the Biden administration to take away tone of their best methods to collect payments. Just <span style="caret-color: rgb(0, 0, 0);">like</span> the student loan debacle, there will be legal action because it impacts many more people. </font></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none">Medical collections are primarily the result of a failed medical system that pays too much with too little benefit. Many families with at least a couple of children end up paying over ten thousand dollars annually for medical coverage. For some, it is the cost to go the doctor a couple of times a year. For others, it is the coverage to prevent a massive medical bill. </span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none">Whatever the situation, the insurance premiums for a regular size family are extraordinarily too high for the benefited that are provided. With the U.S. government subsidizing insurance premiums for millions of Americans, the root cause of the problem becomes more difficult to address because it is just covered up by more government involvement. Throwing more money is not the solution, it just exacerbates the problem. </span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none">We hear that medical debts are not a good barometer of a person paying on a loan. We also heard the same for tax liens and judgments. If a person didn’t make a house payment during the deferred payment period during the pandemic, don’t you think someone who did make their payment would be considered less risky. But yet they are all treated the same. When a debt is owed, it adds more risk to a consumers financial profile. There are repercussions for having all this derogatory information remove from credit reports. </span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none">The problem that is occurring is that credit score requirements keep increasing to qualify for the lowest interest rate and the lowest insurance premiums. Most mortgages raised their requirements from 740 to 780 in the Spring of 2023. Other lenders are following the same lead. </span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none">Those that make payments on time are wrongly hurt by not qualifying for the best interest rate because the goal posts have moved and become more difficult to reach. The end result is millions are paying more who have really good credit, but not excellent credit as now required.</span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none">It may make great headlines to say that missed payments, judgments or tax liens won’t appear on a credit report, or medical debt will disappear. When you turn around, we will all be paying more unless we have an excellent credit score. Additionally, you may be denied services because of these proposed changes. Unless we fix the problem, they are just putting a temporary band aid on the issue.</span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> 131Millions of Credit Reports are Being Unfairly Treatedhttps://mycreditplan.org/Blog/PostId/130/millions-of-credit-reports-are-being-unfairly-treatedKnowledgeMon, 11 Sep 2023 22:54:18 GMT<p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none">Over the last several years, there has been a substantial movement to allow consumers to miss payments, judgments and tax liens deleted form their report. Two states have now passed laws that create an unfair and uneven assessment with consumer credit reports. What is fairness? That some are treated one way and others are treated another way? That is unamerican.</span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none">Medical collections have been a hot topic for the last several years. Once a medical bill went six months past due, it oftentimes has been sent to a collection company. It then appears on the consumers credit report and can drop that credit score 70, 80 and even over 100 points.</span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none">Some states have stepped in to create an unfair advantage for some. Colorado and New York have recently passed state laws that restrict the ability of medical providers and collection companies to report past due medical bills to the credit agencies. What incentive does a consumer have to pay his / her medical bills now? Why do consumers in 48 other states have to pay their medical bill or that bill will show up as a collection, substantially hurting their credit rating.  Only in New York and Colorado, medical collections will not show up in the credit report.</span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none">State legislators have now created an uneven credit report. Those citizens in Colorado and New York gain an extra benefit millions of other consumers do not. Now it is going to be a race to the bottom. Other state legislators will step in and pass other restrictions. </span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:400"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><font color="#000000" face="Calibri, sans-serif" size="3">This issue should be uniform across the country. States should not be allowed to dictate what goes into a credit report. It should be a federal issue so that it is applied evenly. Otherwise, there is inequality and that is what is <span style="caret-color: rgb(0, 0, 0);">happening</span> now.</font></p> 130Many Medical Collections will Fall Off Credit Reportshttps://mycreditplan.org/Blog/PostId/84/many-medical-collections-will-fall-off-credit-reportsGeneralFri, 18 Mar 2022 22:55:58 GMT<p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:normal"><span style="white-space:normal"><span style="text-decoration:none">Millions of consumers have been surprised to pull up their credit report and find a collection from a doctor showing up on their credit report. In a historic change, many of these past due bills will no longer show up on a credit report.</span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:normal"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:normal"><span style="white-space:normal"><span style="text-decoration:none">Back in 2015, the three major credit bureaus, Equifax, Experian and TransUnion, mandated to collection companies that they had to wait at least six months before they could report a medical bill to a collection company. That is the federal guideline, but medical collection companies were pushing collections on consumer credit report within a few months after a service had been rendered. </span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:normal"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:normal"><span style="white-space:normal"><span style="text-decoration:none">Today, there are $88 billion in unpaid medical collections showing up on 43 million American consumer credit reports – roughly 22% of all credit reports. The impact to a credit score from one collection is dramatic, no matter the size. A consumer can expect a drop of upwards of 100 points to their credit scores from the first collection. </span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:normal"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:normal"><span style="white-space:normal"><span style="text-decoration:none">Under an inquiry from the Consumer Financial Protection Bureau, the three major credit bureaus have elected to remove 70% of all medical collections. The process to remove these medical collections will start in July of this year, 2022. Some will not be removed until the first part of next year.</span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:normal"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:normal"><span style="white-space:normal"><span style="text-decoration:none">This is an outline of the collections that will be removed. </span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:normal"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <ol> <li style="margin-left:8px"><span style="font-size:12pt"><span style="font-family:Calibri,sans-serif"> Any medical collections that have been paid will be removed.  </span></span></li> <li style="margin-left:8px"><span style="font-size:12pt"><span style="font-family:Calibri,sans-serif"> New unpaid medical collections cannot be sent to a consumer’s credit report until one year removed from the time of service.</span></span></li> <li style="margin-left:8px"><span style="font-size:12pt"><span style="font-family:Calibri,sans-serif"> Any medical debts under $500.</span></span></li> </ol> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:normal"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:normal"><span style="white-space:normal"><span style="text-decoration:none">What is the downside of this change? Medical service providers will have one less means to collect a debt from a consumer. It is a common understanding that around 30-40% of all patients do not pay their medical debts outside of insurance coverage. This number varies from state to state. But it is a substantial number. </span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:normal"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:normal"><span style="white-space:normal"><span style="text-decoration:none">For this reason, doctors, hospitals and other medical specialist will probably demand payment before services are rendered. It may mean a delay of services provided or even a possibility of having services denied. There is always an unintended consequence. Medical services will be tougher to attain in some situations. </span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:normal"><span style="white-space:normal"><span style="text-decoration:none"></span></span></span></span></span></span></span></p> <p style="text-align:start"><span style="font-size:medium"><span style="font-family:Calibri, sans-serif"><span style="color:#000000"><span style="font-style:normal"><span style="font-weight:normal"><span style="white-space:normal"><span style="text-decoration:none">Just a heads up when you go to the doctor or hospital in the future. </span></span></span></span></span></span></span></p> 84