Stop! Did You Check Your Credit Score?

Ever think that you know exactly what is going on with your credit score?  Well, think that no more!

Some 14 million Americans have errors on their credit report because of medical collections according to the Commonweath Fund, a Washington-based nonprofit focused on health care research. 

These routinely small-balance blemishes can go unnoticed for years and can be a death sentence for refinancing because they can cause outright refusals or make closing costs so high that you decide not to refinance at all.

One case was a resident of Texas who pays 7% on her mortgage.  In October she was astounded to learn that the two medical bills which had been turned over to a collection agency had changed her credit score from 757, making it crash to 680 which made refinancing her home too expensive.

To get a 5.5% interest rate with a 680 credit score meant paying $14K in closing costs.

She contacted the doctor’s office and found out the bills had been issued in error.

Horrifying!

She contacted the doctor, disputed the charges, and they will be removed from her credit reports within 30 days, in the meantime interest rates are rising…she may miss the window.

What’s more is that the Commonweath Fund has found that this is not an isolated case.  Good people with good money and steady employment are finding it difficult to refinance because of medical billing mistakes.

There is a bill working its way through Congress which could provide reief for homeowners with medical debt troubles.  It is called the Medical Debt Relief Act and it would remove settled medical debt from credit reports after 45 days instead of the typical seven years.

Bills often take a long time to be signed into law, so the bottom line these days is to take the bull by the horns.  When you are looking at refinancing or buying San Diego real estate, keep a close eye on your credit score. 

I meet people all the time that do not want to speak with a loan officer before thinking about buying or refinancing, based on the market and economy these days and all the game changers that are out there on a daily basis, that is the first thing that you will want to do.

Need some recommendations on who to talk to?  Get them here!