Be more financially responsible! You need to stop trying to get sick!
✅ .[Verywell News January 8, 2025]. "Outstanding medical debt can no longer impact Americans’ credit scores,
according to a rule finalized Tuesday by the Consumer Financial
Protection Bureau (CFPB). The government watchdog says medical debt can no longer be factored into your credit score."
"Unpaid medical bills may take a long time to show up on your credit report, but the damage to your credit score can be long-lasting once they do. Unpaid medical collection accounts over $500 can remain on your credit report for seven years after they become delinquent."
Medical bills are often the result of unavoidable medical complications or contain errors. The CFPB said past-due medical bills are often inflated, reflect multiple charges for the same service, or charge for services a person never received. The change will affect about 15 million Americans.
😎 Yet another example of the injustice and discrimination that risk-based lending has been imposing on many fine SECU members. When does our Board accept the growing diagnosis that risk-based lending is "member-malpractice" at SECU?
Kinda makes you sick, doesn't it.....
So what you are saying is medical debt will not impact credit scores and therefore will not impact your rate?
ReplyDeleteYes! Medical bills and medical debt have impacted member's scores! Used to be back in the dark ages of the first 85 years, that the loan officer would look at the credit score, look at the member and ask "What happened?" If it was medical debt, the loan was made. In the New Age, score impacted, tough luck member! The computer algorithm says No.You are a sorry person and bad loan risk. No loan for you.
ReplyDeletethe score has always been a computer algorithm. the central issue isn't whether medical debt is in the score or not, it's about how lenders deal with the information that there was an unexpected and unavoidable med expense in the presence of a lower score. people can like it or not, but credit scoring works, and starting a path of suppressing information is a slippery slope. if predictability weakens for lenders, costs go up for all. focus should be on score models themselves. SECU makes a choice on how that score is used in auto decision strategies, pricing, portfolio monitoring, etc. Don't argue scores don't work or aren't fair, argue that it's the wrong thing to do for SECU to use it the way it does for pricing and approval qualification.
ReplyDeleteScoring is an inexact science at best. Credit scores should be a tool NOT a decision maker. It's Lazy Lending to surrender much (all?) of the decision making authority to an algorithm that you don't truly know how it works. It adversely affects many members who are, and have always been, borrowers that will repay their SECU obligations.
DeleteRule-making the humanity out of the credit union is a disaster both morally and financially and the "head in the sand" Board is clueless.
Plus there are countless articles on how ridiculous the scoring process is by the three Credit Scoring companies. No debt, no credit cards, pay bills on time, NO score or terrible one. Max out your credit card one month, even if you pay it off in full no late charges, your score goes down. The list of absurdities in credit scoring is almost endless. Should never be the sole, determining factor. some folks with a good credit score should obviously not be getting the loans SECU is making to them. One reason for the high delinquency and chargeoffs. It's clear to many members that numerical algorithms won't always determine who will pay back the loan. The old SECU was excellent at that...
DeleteCredit score is not the sole determining factor in loan approval. Never was. It only determines your rate.
Delete2:38 That's sorta correct but regardless, some hired-gun debt collector of med debt (which all now agree should be discharged) which has been reporting to the credit bureau is effectively setting the rbl upcharge rate at SECU ... doesn't say much good about SECU.
Delete