Building good credit is essential to a home purchases. For many Americans, obtaining a high credit score is quite elusive, unfortunately. Add in the current economic climate with high inflation, record fuel prices, and high housing costs and building credit becomes even more difficult. However, there is some good news for the segment of the population with medical debt.
Medical debt and your credit score
As of July 1, 2022, the three major U.S. credit reporting companies stopped counting paid medical debt on the reports that banks, potential landlords and others use to judge creditworthiness. In addition, these credit rating bureaus will also give people up to a year to resolve delinquent medical debt that has been sent to collections before reporting it. (Previously, this time frame was 6 months.)
Beginning next year, these companies will also stop counting unpaid medical debt under at least $500. It is estimated that these changes will wipe out nearly 70% of the medical debt listed on consumer credit reports. While these are certainly positive changes for many Americans with medical debt, some argue that medical bills should not be included in credit reports at all. According to research from the Consumer Financial Protection Bureau, mortgages and credit cards are better predictors than medical bills of whether someone will repay a debt.
Summary
Overall, these are positive steps for consumers considering the fact that 58% of of the debt in collections and on credit records is from medical bills, and past-due medical debt. In particular, in light of the current economic challenges faced by many Americans, these changes may benefit many consumers. Are you thinking about buying, selling, or renting in South Florida? Contact one of our team members at Live South Florida Realty, Inc. today!
At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our trusted “Florida Home Search” app is available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!
