Interested in purchasing a new home but concerned about the affordability of the mortgage payment?…
Medical Collections Hurting Home Buying Plans? Read This Important Update.
Medical Collections on your credit report can lower scores significantly and limit your home buying options. Often times, homebuyers are not even aware of the medical collection until their mortgage broker discusses their recent credit report.
Recent significant changes in medical collection reporting may help homebuyers.
Recent Significant Changes in Medical Collection Reporting May Help Homebuyers.
If you tried to pre-qualify for home loan last year and were discouraged with your credit scores now may be the time to re-check your credit report. If a medical collection was on your previous speak with your mortgage professional for additional information and guidance.
Reach out to an experienced, trusted local mortgage expert to discuss pre-qualification based on a fresh credit report.
One change became effective July 1, 2022. That change mandated that PAID medical collection debt will no longer be included on consumer credit reports.
In addition, the time period before unpaid medical collection debt will appear on a consumer’s report will be increased from 6 months to one year.
This change provides prospective homebuyers additional time to resolve any known medical billing issues before the collection is reported and does harm to your credit.
Medical Collection Reporting Change in 2023
A big positive change for home buyers will take place iIn the first half of 2023. Equifax, Experian and TransUnion will NO LONGER INCLUDE medical collection debt under $500 on credit reports. Often times we will see a credit report with medical collections for smaller amounts – like $100 or $200 and these multiple collections can definitely affect scores negatively.
Each person’s credit profile is unique and individual credit score impacts will vary.
Remember, an educated homebuyer is empowered to making the wisest financial decisions. After all, buying a home is most likely the biggest investment you will make in your lifetime.
Good Luck on your homebuying journey.
Richard Blair NMLS # 213176 is a mortgage broker that has served homebuyers for the past 25 years. The goal is to educate homebuyers with up-to-date information that will help them make wise financial decisions during the home buying journey.