Medical Collections Tanking Your Credit Score? Big Changes Ahead
Mortgage Banker
Richard Blair
Published on May 12, 2022

Medical Collections Tanking Your Credit Score? Big Changes Ahead

Do you have medical collections on your credit report that is lowering your credit scores?  Credit score is such an important factor in qualifying for your home loan. Your score will impact the rate you pay for your mortgage loan, the loan options available and even your ability to qualify. Medical collections can be so frustrating for home buyers. Many times, the home buyer is not even aware of the medical collection and assumed insurance had paid the medical provider.

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Finally, some good news for home buyers that have struggled with medical collections holding down their credit scores.

  1. As of July 1, 2022, a paid medical collection will no longer be included on a consumer credit report.
  2. Also, effective July 1, 2022, the time before an unpaid medical collection appears on a consumer’s credit report will increase from 6 months to one (1) year.
  3. Targeted for mid-2023, medical debt collections under $500 will no longer be included on consumer credit reports.  It is common for very small dollar amount medical collections (like under $100) to show up on a credit report and lower the home buyer’s score.

Often time the consumer did not even know about the medical collection until the loan originator showed them the credit report.

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The longer period will allow a consumer more time to resolve any debt conflicts with the medical provider and/or insurance company.

For more information on increasing your credit score before you start the homebuying journey-check out this short blog article.

About the Author- Richard Blair, NMLS# 213176, is a mortgage loan originator with dwell Mortgage, a Victorian Finance Company. Richard has over 24 years of experience helping families as a mortgage professional. His goal is to educate home buyers to make wise financial decisions when choosing the best mortgage for their financial goals. 

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