Mortgage and Credit News | Waccabuc Homes



All of us who have a career in real estate sales or financing should be aware of common credit issues our clients face since our businesses usually depend on specific credit scores for loan approvals. By understanding and educating we may be able to avoid a potential failed transaction or higher pricing for our clients.

Medical collections are one of the most popular causes of credit score drops that we see for a variety of reasons. Unfortunately they are also very misunderstood. A recent study by Trans Union revealed that 54% of insured individuals are confused about medical bills. Since collection agencies are usually small companies they save in expenses by only reporting delinquencies to two of the three major credit bureaus. Although they usually don't report to all three bureaus, the middle score can still drop dramatically and change pricing or approvals on a loan. Credit scores can drop hundreds of points from one collection, and most people do not understand how easily they can be put in this vulnerable position.

Here are some examples of how medical debt can affect your credit unknowingly:

-Jack is having surgery on his knee. He checked with his insurance company to confirm the surgeon is covered under his medical plan, but unbeknownst to him the anesthesiologist is not covered under his plan so he goes through with the surgery anyway. A few months after the surgery he is back to his normal life and unaware of any problems. He receives some odd looking envelopes in the mail that do not look familiar and he assumes they are junk. He shreds them and doesn't give it another thought. A year goes by and he is getting ready to start shopping for a property. He pulls his credit and sees a collection account for medical debt. Once he researches this thoroughly he is shocked to learn about the debt he owes and how much it dropped his credit scores.
 
 
 
 
Do you have any credit questions?


Tracy Becker, President
155 White Plains Road
Suite 200
Tarrytown, NY 10591
or (toll free) 866-388-9400
F :(914) 524-5014 ​​
 

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