43 Million Americans Have Unpaid Medical Debt on Their Credit Reports

Americans' credit reports contain unpaid medical debts far more than any other kind of unpaid bills, the Consumer Financial Protection Bureau has found in a study. A "staggering" 52% of all unpaid debt entries listed on credit reports is from medical expenses, the bureau says. And some 43 million Americans — or about one in five adults — have an unpaid medical debt on their records, dragging down their credit scores. Many of those derogatory entries on credit reports are the result of America's confusing medical billing and insurance payment system, the CFPB says. Some 15 million Americans have only unpaid medical debt on the derogatory side of their credit reports, suggesting those consumers don't have trouble paying other bills. Also, most unpaid medical bills are small — the median amount is $200, far lower than the median unpaid bill for credit cards or auto loans. View photo . CFPB "Today's study found that many consumers are affected by medical debt, that medical debt dominates collections trade lines in the credit reporting system, and that the appearance of medical debt information on credit reports can reflect the complexity, confusion, and delays that characterize medical billing and insurance reimbursement rather than the consumer's ability or willingness to pay their debts," said CFPB director Richard Cordray in a statement about the research. "If a credit score is supposed to be a predictor of a consumer's likelihood of paying back a debt, these findings raise serious questions about how medical debt collections items affect a consumer's credit score." The report highlights efforts already under way in the credit reporting system intended to reduce the impact that unpaid medical bills can have on a consumer's credit score. Earlier this year, the CFPB released a report showing that consumers with unpaid-medical-debt-only credit reports paid their bills at the rate of other consumers with higher credit scores, suggesting current scoring formulas inaccurately reflected those consumers' credit-worthiness. In August, Fair Isaac, keepers of the FICO credit scoring formula, said it was changing its formula, and the penalty for unpaid medical debt would be reduced. It will take time for lenders to adopt the new formula, however. This study further found that unpaid-medical-debt-only consumers owe less, have more available credit which they could use to repay their debt, and are more reliable payers than consumers with non-medical collections tradelines. The problem, the report suggests, is that many consumers don't know who to pay, or what they owe, after medical procedures. "Lack of price transparency and the complex system of insurance coverage and cost sharing means many consumers, including those who have health coverage, receive medical bills that are a source of confusion," it says. The report also highlights the hundreds of firms that might ultimately report a patient as late on a medical bill. Their "indirect affiliation with the debt introduces potential sources of error in collections reporting," the CFPB said. Medical debts also draw a larger percentage of disputes than other kinds of debt, the CFPB said. As part of a larger initiative, the CFPB announced Thursday that it was now requiring large credit reporting agencies to provide regular reports about the accuracy of their data, including new details on creditors who attract the most disputes. "These reports will specify the number of times consumers dispute information on their credit reports during that period," the CFPB said. "It will also list furnishers with the most disputes, industries with the most disputes, and furnishers with particularly high dispute rates relative to their peers. We will also see how those disputes get resolved." If you are worried a medical bill could be hurting your credit, you should pull your credit reports, which are available to you for free once a year under federal law. You can also check your credit scores regularly to spot a medical bill that may have gone to collections. CALL BANCO FINANCIAL SERVICES TODAY AT 248-286-5100 FOR ALL OF YOUR CREDIT RESTORATION NEEDS!

Another type of information that determines your credit score is your revolving debt ratio. This calculation determines 30% of your credit score. What is revolving debt? http://www.bancoservices.org gives a great explanation: Definition: Revolving debt is debt that typically has a variable interest rate, an open-ended term and payments that are based on a percentage of the balance. Revolving debt has a pre-determined limit, agreed upon by the lender and borrower. Credit cards are the most common type of revolving debt that consumers use. The interest rate changes, there is no deadline to pay them off and the amount of the payments is determined by the balance on the card. Call 1-800-442-1591

The holidays are prime time for ID theft

Be Smart About Your Smartphone If you use a smartphone, make sure you have a passcode or other lock on it “so thieves cannot access apps you use to make purchases if you lose your phone,” Reese says. And don’t save receipts on your phone or on public computer hard drives; if they get into the wrong hands, thieves can steal personal information from them. If you use your smartphone or tablet to pay bills, conduct banking, or shop online, refrain from doing so unless you’re home, at your office, or in another place with a secure Wi-Fi connection. Avoid entering private information when using an unsecured, or public, Wi-Fi network, such as those available in coffee shops or hotels, says Lynn Ballou, managing partner of Ballou Plum Wealth Advisors in Lafayette, Calif. “It's so easy to forget this when we have time between flights to a holiday destination and want to do a little online retail therapy or pay some bills while at the airport. You never know who's lurking.”

One of The Behaviors That May Hurt A Young Person's Credit Score

Canceling a Gym Membership. If you decide you can actually do without that gym membership but fail to follow the gym’s membership cancellation procedures, you could end up seeing a drop in your credit score. Most gyms list exactly what you need to do to cancel in their membership agreement, so be sure to read the fine print and follow their procedures. If you end up canceling before a certain date or stop payments from your automatic withdrawal setup, the gym could take action and report you to the credit bureau. Call 1-800-442-1591;

One of The Behaviors That May Hurt A Young Person's Credit Score

Renting a Car. Not all rental car companies do this, but you may find that your rental car company runs a credit inquiry even when you use your debit card to secure the vehicle. Read the fine print of the terms and agreement paperwork carefully or just ask the rental specialist what the policy is for new customers. Remember that any type of hard inquiry—even if it’s not for more credit—will drop your credit score by a few points. Call 1-800-442-1591 to get a CREDIT EDUCATION CD for $99.00

QUESTIONS? CALL OUR OFFICE FOR THE ANSWER:

1. The Fears of a Pay After Deletion Credit Repair Customer, Is this you? 2. Scared about investing thousands of dollars upfront with a credit repair company without really knowing if they will be able to help you? 3. Worried about having to pay monthly fees that can drag on for years without knowing if you will get actual results? 4. Wondering if the money you are about to give to that nice stranger will grow legs and disappear? 5. Tired of wasting your valuable time waiting for items to be removed from your credit report? 6. Nervous about running into a professional scammer who will take you money and just disappear? 7. Curious as to whether the company you are about to pay a fortune to actually has a clue about credit repair? BANCO Capital Corp has been around since 1997! We start your credit restoration the day your application fee is paid. Our clients start seeing results within 14 business days and it's directly from the Credit Bureaus. We are an A+ with the BBB! Call today! 1-800-442-1591 - Gaining Financial Stability with Intelligence and Integrity!

4 Ways to Raise Your Credit Score in 2018

1. Payoff past due accounts. The bulk of your credit score – about 35 percent – comes from your payment history. The more often you make payments on time, the better your score will be. So start by checking your credit report for past due accounts. If you have several past due accounts, it's time to triage. Accounts that are 90 days late will have a bigger negative impact on your score than those that are 60 or 30 days late. So pay off the most past-due accounts first, and gradually catch up on all your payments. 2. Ask for good faith adjustments. When you look at your credit report you may see just one or two late payments. Maybe these payments were late because of an oversight or because of a one-time financial problem that has since been resolved. In this situation, you might get an automatic boost to your credit score by asking for a "good faith adjustment." Call or write to the creditor, and ask for a courtesy adjustment. If you've been a good customer and only have one or two late payments on your account, many creditors will remove the late payment from your credit report. 3. Deal with collection accounts, charge-offs and liens. Accounts that have been charged off or sent to collections have a negative impact on your credit score, and you need to be careful how you deal with them. Paying charge-offs or liens that are older than 24 months won't boost your credit score. Address charge-off accounts that are less than 24 months old first, then pay the others when you have the funds to do so. Pay off collections accounts as well, but be aware that paying off collections accounts can, at first, cause your credit score to drop. That's because when you make a payment, the last activity on the account becomes more recent, making it weigh more negatively in your credit file. The best way to avoid this problem is to ask the collector to erase the account from your credit file when you pay it off. Many collections agencies will delete reporting when you've paid off the account. If the agency agrees to this, be sure to ask for a letter stating that the agency agreed to delete the account upon receipt of your payment. 4. Improve your debt-to-credit ratio. Another factor used to calculate your credit score is amounts owed. Amounts owed isn't about the actual dollar amount you owe but your debt-to-credit ratio – how much money you owe versus how much credit you have available. There are several ways to improve your debt-to-credit ratio, which is probably the fastest way to improve your credit score. Here are a few to try: Ask for a credit increase. This improves your debt-to-credit ratio without paying an extra dime on your outstanding debt. Move credit card balances. Keep your debt at or below 30 percent of your credit limit on each credit card. One way to do this is to simply move balances between cards, even if it means opening a new card. (Plus, you might be able to take advantage of balance transfer promotions.) Pay down revolving debt first. Your credit score will reward you somewhat for paying down installment loans, but you'll get the most bang for your buck when you pay down revolving debt like credit cards and lines of credit. Transfer debt to a personal installment loan. Consolidate all your credit card debt under a personal installment loan.

Can I Consolidate Federal & Private Student Loans Together?

If you have student loans, chances are you're dealing with multiple interest rates, multiple loan servicers and multiple monthly payments – a surefire recipe for multiple headaches. The idea of consolidating all your loans together sounds like a great way to simplify, but is that even possible when you have both private and federal loans? More importantly, is it advisable? The short answer to the first question is yes, it is possible. But in order to decide whether it makes sense for your situation, there are some considerations to take into account. Here's what you need to know: The Term "Consolidation" Can Have Different Meanings Consolidating student loans simply means combining them together, but there's a difference between consolidating through the government's Direct Loan Consolidation Program and consolidating through a bank or alternative lender. When you consolidate student loans through the Direct Loan Consolidation Program: •Most (but not all) federal loans are eligible, and private loans are not allowed. •The resulting interest rate is a weighted average of the original loans' interest rates, which means no money is saved. •You may be able to select a new, longer term, which can reduce your monthly payments; however, a longer term can also end up costing you more money in total interest. When you consolidate student loans through a private lender: •In most cases, only private loans are eligible (although a handful of lenders accept both private and federal student loans). •You're offered a new interest rate based on your current financial situation, including your credit score (which means those loans are being refinanced as well as being consolidated). •If you qualify for a lower interest rate, you may be able to reduce your monthly payments or shorten payment term, and you can save a significant amount of money on total interest. Okay, so we've established that certain lenders will allow you to consolidate your private and federal loans together. Now let's talk about whether that option is right for you.

Develop a plan that works if you are in need of credit improvement. You must be dedicated to making some significant changes in the way you spend your money. Be sure to buy only the things that you need. Consider if a purchase is both essential and affordable, and only purchase it if you can answer “yes” on both counts. Reduce the amount of your debt. Creditors take note of your debt versus your income. If your debt levels are unusually high for your income, your credit score will suffer. Since it will likely take a while to get rid of your debts, write a plan for decreasing your debt gradually, and follow it. Call BANCO to get a FREE Credit Consultation. Gaining Financial Stability with Intelligence and Integrity! Call 1.800.442.1591 - We are ONE of the best in the business.

CREDIT TIP!

Make sure that you keep records of everything when interacting with credit bureaus. Make note of every call or letter you send or receive. Call 1-800-442-1591; unless you contact a credit professional that can take care of everything for you - Gaining Financial Stability with Intelligence and Integrity!

Credit Scores

The exact formula varies, but credit scores are based on complex algorithms that include factors such as the length of your credit history, the amount of available credit, outstanding debt and negative marks such as bankruptcies, collections or late payments. Of all the different types of scores the FICO is the most widely used by lenders and range from 300 to 950. Let our office assist you in understanding your Credit Report; 1.800.442.1591 - Gaining Financial Stability with Intelligence and Integrity!

IRS Warns Taxpayers To Be Diligent As Identity Thieves Add New Twist To Phone Scam

For the past several years, the Internal Revenue Service (IRS) has been encouraging taxpayers to file their returns electronically. That’s why it came as a shock to John* (not his real name) when he received a phone call (allegedly) from the IRS advising him that he needed to file his federal income tax return by mail. The reason? He was (allegedly) the victim of identity theft and as a result, he was not eligible to file electronically: the return and the payment were to be filed by regular mail. That was the first of a series of communications (allegedly) from the IRS. A subsequent phone call purported to be from IRS Criminal Investigations (IRS-CI) and asked that John return the call to discuss the identity theft. He was also advised that he would be served with a summons at his home if he ignored these communications. The efforts to reach John were pretty persistent: at least once, IRS Criminal Investigations (allegedly) left a voice mail for John and asked that he call back immediately. John saved the message and played the call for me at his office. Despite the official sounding lingo, John figured out pretty easily that this was a scam. But it sure sounded real.