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Medical Debt Impacting Credit

Does Medical Debt Impact Your Credit Score?

By | Debt

Medical debt is no longer displayed on your credit report the same way it used to be, but it can still impact your credit if it goes unpaid for too long. With recent changes in reporting requirements, there are new rules surrounding how long you have to pay off your medical debt before it gets reported and starts impacting your credit.

Here’s what you can expect to happen to your credit once you start to accumulate any kind of medical debt.

When Medical Collections Show Up on Your Credit Report

Medical debt doesn’t show up on your credit card until it’s left unpaid and goes to collections. Early on, it’s treated like any other bill in that it’s not listed on your credit report. If it’s a large amount that you can’t pay off in a lump sum, it’s best to try and sign up for a manageable payment plan with your medical provider. However, if you don’t pay on the balance for whatever reason, your account could end up being sold to a debt collection agency.

At that point, the collection agency is likely to report your medical debt to the credit bureaus. Like many other types of negative entries, medical debt is listed on your report for seven years, unless removed by initiating a credit dispute. The seven-year period starts from the first delinquency date associated with your medical debt.

What Happens to Unpaid Medical Debt

On the plus side for consumers, there are some extra restrictions that the credit bureaus must abide by when listing medical debt. Even if the collection agency reports the debt to Experian, Equifax, or TransUnion, the credit bureau must give you a 180-day grace period to pay off your balance. That period starts from the original due date, giving you a full six months to make arrangements to pay the bills.

So even if your health care provider sold the debt three months after your due date, you still have another three months to catch up. This also gives you time to potentially ask your insurance company to help you negotiate. The claims process can be a slow and tedious one, so this extended grace period is meant to make sure your credit doesn’t tank just because your insurance company took too long to pay all or part of the balance. Once the debt makes it onto your credit report, it’s listed as an unpaid collection.

How Credit Scoring Models Weigh Your Medical Debt

If you don’t manage to pay off your medical collections debt within the grace period, it will then likely be listed on your credit report. However, your score won’t suffer as much compared to other types of debt. That’s because the latest scoring models from both FICO and VantageScore don’t weigh medical debt as much as other types of debt, particularly credit card balance. It makes sense why — medical bills don’t generally indicate a pattern of poor financial decisions.

On the downside, not all lenders and financial institutions use the most current scoring models from FICO or VantageScore. Older versions may weigh medical debt equally with other kinds. Still, as companies continue to move forward and upgrade their lending platforms, it’ll be much easier to improve credit related to medical debt.

How Credit Disputes Work for Medical Debt

It is possible to get unpaid medical debt removed from your report so that you can fix your credit score before you reach the seven-year delinquency mark. Check your records for any credit errors. If you find any discrepancies in the debt amount, payment debts, or any other information, you may be able to start a credit dispute and have the entry negated. This entails sending a letter to the credit bureau. Regardless of their findings, the investigation should be completed within 30 days. Be sure to keep copies of all your communications related to your medical debt, both with the collection agency and the credit bureaus.

If you’re trying to fix your credit related to medical debt or any other negative items on your report, it can be helpful to get professional help. You certainly can execute the dispute process on your own, but it can be an extremely time-intensive process. And if you don’t research your rights adequately, you may end up doing more damage to your credit score.

Luckily, a professional firm like Ovation Credit can help. Our team of lawyers has years of experience in the field, plus knowledge of the intricacies of credit and debt law.

Get started with a free consultation today to start the credit repair process.

Sources:

https://www.experian.com/blogs/ask-experian/what-happens-when-medical-bills-go-collections/

https://www.experian.com/blogs/ask-experian/can-medical-bills-affect-credit-report/

Fresh Start: Make Sure Your Credit Repair Efforts Count.

By | Credit Laws, Credit Repair, Credit Reports, Credit Scores, Fraud Protection, Save Money

Have you been turn down for a loan recently because your credit score is too low?  Don’t worry – it is very common.  It is also becoming very common for lenders to try to sell you on their own special credit repair programs.  Credit repair can be an extremely rewarding and beneficial experience if done the right way.  If you are seeking a fresh start and intend to embark on the credit repair journey, make sure your efforts count.

So how do you make sure that your credit repair efforts count?  For starters, be informed. If you do a little research, you will find many articles discussing credit repair.  You’ll see many articles that claim that you can do your own credit repair.  This is absolutely correct – you do not have to have assistance.  If you do a little more research, you’ll see that credit repair involves procedures that appear simple on the surface, but become more and more complex as the process unfolds.

Make sure your credit repair efforts count by only working with a professional that truly specializes in credit repair. How will you know?  Consider the following:

How long has the entity been offering credit repair services? It doesn’t matter how long an entity has been selling credit reports, or giving credit reports away for free, or making loans, it only matters how much experience the entity has when dealing with credit repair.   Ovation Credit Services has been addressing credit repair and credit report repair issues exclusively since 2004.  Ovation has extensive disputing experience – we have dealt with everything that you can imagine when it comes to credit reports and credit repair.

Does the entity have any expertise in credit repair? Claiming expertise is not enough.  Ovation Credit Services was founded by attorneys that understand the laws and regulations involved with credit repair.

Can you verify the credit repair services offered? Do a search on the company’s name on Google.   What do you see?  Can you find any information specifically addressing the credit repair services offered?  If you are considering spending money on credit repair services with a company that does not have a definitive and verifiable presence in regards to credit repair, save your money.  It is better spent paying towards debts.

Check the Better Business Bureau profile. If the company does not have a profile, has a poor rating, or does not list credit services and/or credit repair as a service offered, save your money.  Companies that offer synthetic secondary credit repair services as an alternative to their primary service rarely disclose these services to credible consumer protection type entities such as the Better Business Bureau.

If you are really looking for a fresh start, and you are considering hiring a credit repair company to assist you, be sure to hire a company that truly specializes in credit repair.  That is the best way to ensure that your credit repair efforts will truly count.

 

Credit Repair: The Sony Security Breach And Your Credit Profile

By | Consumer Rights, Credit Repair, Credit Reports, Credit Scores, Fraud Protection

Sony recently announced a security breach for users of the PlayStation Network.  Today, up to 100 million users may have been affected.  Data concerning credit card information, addresses, email, birthdate and more may have been compromised. The magnitude of damages caused by this breach has yet to be determined, but it is realistic to expect extensive damages related to identity theft. So what does a company as large as Sony do in response to such an unfortunate event? 

Sony announced that they took following steps:

1) Temporarily turned off PlayStation Network and Qriocity services;

2) Engaged an outside, recognized security firm to conduct a full and complete investigation into what happened; and

3) Quickly taken steps to enhance security and strengthen our network infrastructure by rebuilding our system to provide you with greater protection of your personal information.

Sony also provided some good general advice:

“For your security, we encourage you to be especially aware of email, telephone and postal mail scams that ask for personal or sensitive information. Sony will not contact you in any way, including by email, asking for your credit card number, social security number or other personally identifiable information. If you are asked for this information, you can be confident Sony is not the entity asking. When the PlayStation Network and Qriocity services are fully restored, we strongly recommend that you log on and change your password. Additionally, if you use your PlayStation Network or Qriocity user name or password for other unrelated services or accounts, we strongly recommend that you change them as well.”

Sony also provided some good advice about protecting against idently theft:

“To protect against possible identity theft or other financial loss, we encourage you to remain vigilant, to review your account statements and to monitor your credit reports. We are providing the following information for those who wish to consider it:

          – U.S. residents are entitled under U.S. law to one free credit report annually from each of the three major credit bureaus. To order your free credit report, visit www.annualcreditreport.com or call toll-free (877) 322-8228. 

        – We have also provided names and contact information for the three major U.S. credit bureaus below.  At no charge, U.S. residents can have these credit bureaus place a “fraud alert” on your file that alerts creditors to take additional steps to verify your identity prior to granting credit in your name. This service can make it more difficult for someone to get credit in your name. Note, however, that because it tells creditors to follow certain procedures to protect you, it also may delay your ability to obtain credit while the agency verifies your identity.  As soon as one credit bureau confirms your fraud alert, the others are notified to place fraud alerts on your file. Should you wish to place a fraud alert, or should you have any questions regarding your credit report, please contact any one of the agencies listed below: Experian: 888-397-3742; www.experian.com; P.O. Box 9532, Allen, TX 75013.”

But the burden is on you to protect yourself.

While Sony provided some great advice, they seem to be pushing the burden of reducing the risks of identity theft to the consumer. Studies have shown that only about 10% of American consumers check their credit reports regularly. The reality is that consumers must take proactive steps to protect themselves.  If you think your information may have been compromised in this breach, and you are uncertain about how to protect yourself, give us a call at www.ovationcredit.com.  We’ll help explain the process to you.

You’re Ready. Is Your Credit?

By | Consumer Rights, Credit Repair, Credit Reports, Credit Scores, Personal Finance, Your Credit

Armed with an impressive resume and knowledge of the company you are interviewing for, you confidently approach the interviewer and begin to craft the inspiring ‘first impression’ you envisioned last night as you went to bed.

You may feel prepared for the interview and qualified for the new job, but there is a strong possibility that the interviewer has already formed an opinion about you – through information contained in your credit report. 

Increasing numbers of companies are requesting credit reports to assist them in the job hiring process.  Essentially, your credit report is your financial resume and employers use it as an indicator of your personal integrity and how and how you conduct your life.  With that in mind, it’s alarming that seventy none percent of all credit reports contain errors.  A qualified job seeker simply can’t afford to have credit report errors sabotage an excellent employment history.

In the competitive job market, an accurate credit history may be the decisive factor in gaining a job interview.  Inaccurate credit reports can torpedo the most impressive resumes, and you won’t have a second chance to make a first impression.

The labor market is not only intense form the job seekers standpoint, but employers also are striving to gain a competitive advantage in the hiring process by accessing all the information available to improve the quality of the workforce.  Employers are also more likely to check the credit history of prospective employees who will be involved in some aspect of the company’s finances.

You can use this trend of employer credit checking to your benefit by repairing and/or maintaining a clean credit history.  Your credit report is your financial fingerprint, so check it frequently and keep it accurate so you are prepared to jump on the dream job opportunity should the occasion arise.

Information on Credit Reports

By | Consumer Rights, Credit Laws, Credit Repair, Credit Reports, Credit Scores, Fair Credit Reporting Act

Credit Reports generally contain five types of information:

Identification Information: Information such as the name of the individual, current and previous residential addresses, and Social Security number.

Trade Line Information: Detailed information reported by creditors and other furnishers on each current and past loan, lease, or other debt (such as utility and medical debts).

Public Record Information: Information derived from financial-related public records, such as records of bankruptcies, foreclosures, tax liens, garnishments, and other civil judgments.

Collection Account Information: Information reported by collection agencies regarding credit accounts and other debts.

Inquiry Information: Identities of individuals or companies that have requested information from an individual’s credit file; the date of inquiry; and an indication of whether the inquiry was by the consumer, for the review of an existing account, or to help the inquirer decide on a potential future account or relationship.

Unfortunately, an alarming number of these files (credit reports) contain serious errors and could cause the denial of credit, a loan, or a job, so monitor your credit report and minimize or eliminate future credit problems.  A recent study of consumer credit found that 3 out of every 4 credit reports contain errors, some large enough to cause credit denials.

  • Twenty-five percent (25%) of the credit reports contained errors serious enough to result in the denial of credit;
  • Seventy-nine percent (79%) of the credit reports contained mistakes of some kind;
  • Fifty-four percent (54%) of the credit reports contained personal demographic identifying information that was misspelled, long-outdated, belonged to a stranger, or was otherwise incorrect;
  • Thirty percent (30%) of the credit reports contained credit accounts that had been closed by the consumer but incorrectly remained listed as open.

Credit Repair: How Can You Tell The Good From the Bad?

By | Consumer Rights, Credit Repair, Fraud Protection

It’s a jungle out there! The following list identifies a few things you should consider when selecting a credit repair company:

1: Does the company identify their owners/attorneys, or addresses?
Unfortunately, the internet allows many scammers to appear as legitimate companies through legitimate looking websites. Before you give your hard earned money and personal information to anyone, make sure you can verify the company’s information and credentials. You can verify Ovation’s information from a number of independent sources including the Florida Bar, the Florida Department of State, and the Better Business Bureau.

2: Does the company have significant Better Business Bureau Complaints (or are not even affiliated with the Better Business Bureau)?
While any company can accrue a few random BBB complaints, significant number of complaints may be an indication that the company does not operate fairly towards its customers. Check BBB reports frequently and avoid companies that manage to accrue hundreds of complaints. To check for complaints, visit www.bbb.org and click on “Go to Local BBBs”. Question any company that chooses not to be affiliated with the Better Business Bureau; they may be trying to hide the truth about their organization. Our history with the Better Business Bureau dates back to 1976.

3: Does the company request fees in advance?
The Credit Repair Organizations Act (CROA) requires that credit repair company charge for services only after they are  rendered. Requirements for large upfront payments are tell-tale warning signs of unethical companies. We only charge for work that has been completed in full. Learn more about the CROA in our Learning Center.

4: Does the company disclose your rights?
Consumers have the right to conduct their own credit report repair. You don’t have to hire someone to do if for you. For those that do, Ovation offers its services to individuals seeking legal professionals to manage their credit report repair. Ovation discloses your rights to you on every page of our website as well as in your signup package. We want you to be informed and you should steer clear of any company that doesn’t want you to know your rights.

5: Does the company advocate illegal tactics such as creating “new” identities?
Creating a new identity by applying for a Employer Identification Number to merge or replace a social security number is a serious crime and can lead to significant personal liability. To learn more about this type of illegal credit tactic, visit our Learning Center.

6: Does the company advocate fraudulent reporting of credit lines?
Purchasing a listing on someone else’s credit lines for the purpose of reporting a positive account is unethical at best. Trying to con the credit bureaus and your future and current creditors is a significant issue that can lead to personal liability. To learn more about this type of illegal credit tactic, visit our Learning Center.

7: Does the company simply dispute all your negative items without requiring any input for the client?
Regardless of how they market themselves, this is a key indicator that the company is a “rookie”. Not only are these types of companies violating federal law by disputing on your behalf in bad faith (which could lead to personal liability), these companies are making it more difficult for you to achieve sustainable results. To learn more about this type of illegal credit tactic, visit our Learning Center.

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