Are Your Medical Bills Hurting Your Credit Score?
According to a report by Consumer Financial Protection Bureau (CFPB), nearly 49.5 million U.S. consumers have unpaid medical debts. The report reveals that inaccurate medical bills can play a huge role in bringing down consumer credit scores.
Almost one in six credit reports contain medical debt collection according to the Federal Reserve and about two in five Americans have reported a lower credit rating in 2013 on the count of unpaid medical bills. At RepairMyCreditNow (RMCN), we have expert knowledge on how collection accounts like unpaid medical bills can adversely affect your credit score. We also offer specialized credit repair services to boost your score if this is the case.
Impact on your Credit Score
Any collection item, including medical bills, can lower your credit score. Even a small debt of $100 can bring down your credit score by more than 40 points as per the scoring models used by Fair Isaac Corporation (FICO). The incorrect bills hurt people with higher credit score as much as someone with a lower credit score. To make matters worse, the incorrect data will stay in your credit report for the next seven years, or until it is removed.
Introduction of new reporting rules
Large amounts of medical debt have resulted in the CFPB questioning the system being used for gathering and reporting debt. In response to this, the bureau has created new reporting rules to make it easier to spot errors.
The bureau has also announced that major credit reporting agencies like Experian, Equifax and TransUnion will be required to report all complaints they receive regarding the accuracy of the consumer credit report. This will help the bureau to recognize debts that have been reported erroneously.
The initiative has been taken at a time when credit reporting bureaus are looking for ways to change how they measure consumer credit. The purpose for these new rules for debt collection agencies is to increase the accuracy of credit reports and protect consumers from unfair penalty to their credit scores.
If you or someone you love is facing the burden of a low credit score, our team of experts can guide you to a better credit score with our effective and structured process. For more information, contact us today: https://www.repairmycreditnow.com/contact-us.htm