Is your credit score impeding you from buying a home? Support The Medical Debt Responsibility Act

Is your credit score impeding you from buying a home? Support The Medical Debt Responsibility Act

Is your credit score impeding you from buying a home? Unfortunately, one of the biggest credit score killers is unpaid medical collections. Too many people have found themselves in this troublesome situation. But help may be on the way!

In June 2011, a bill titled the Medical Debt Responsibility Act was introduced to Congress by a bipartisan group. This bill would require that the three national credit reporting agencies, Equifax, Experian and TransUnion, to remove medical collection records of $2,500 or less from credit reports within 45 days of being paid or settled. Can you imagine how many uninsured and under insured Americans this could help?

Below Are Some Reasons to Support the Medical Debt Responsibility Act Bill:

1. Medical bills are sent to collections quite rapidly by medical professionals
2. Collections can have a huge impact on interest rates
3. To improve credit scores so that Americans can buy homes and stimulate the economy
4. Medical bills are not considered a planned event and are usually a necessity or an emergency
5. Some medical bills are disagreements over co-payment
6. Some consumers may not be aware that the hospital or doctor turned the bills over to collections
7. Some consumers don’t know that medical debt collections are on their credit report until they apply for a loan

Collections currently stay on your credit report for 7 years from the first date of delinquency. This is when the account first became 180 days late. Collections are considered a major delinquency and have an impact on credit scores. And as we all know, lower scores mean paying higher interest rates or perhaps not qualifying for a loan.

Many experts in the credit industry are concerned about the implications of removing collections from an individual's credit score. While their concerns are understandable, so many hard working Americans are being overlooked by lenders due to an unforeseen medical problem.

These aren't planned expenses. They don't reflect a bad decision on the part of the individual. Maybe it's time to support the Medical Debt Responsibility Act and hopefully bring about a credit environment that makes home buying more accessible for credit-worthy people who have experienced illness and hardship.