MARQUETTE, Mich. (WZMQ) – More than 40% of American adults say they are in debt due to medical or dental bills. That’s more than 15 million Americans living with unpaid medical debt that’s reflected in their credit scores. A new rule by the Consumer Financial Protection Bureau will prevent the three credit reporting agencies from including past-due medical bills from credit reports. Allie Prim, Vice President of mortgage lending at the UP State Bank, believes this new rule will benefit many of her clients.
“Well, I think it can certainly be impactful to a lot of people who may have medical debt that’s blemishing their credit and reducing their credit scores,” said Prim.
The CFPB predicts that over 15 million Americans will see their credit score rise by as much as 20 points, an increase that could make all the difference for would-be homeowners.
“I think that those individuals who have otherwise impeccable credit are definitely going to have doors open for them because the debt load isn’t considered,” explained Prim.
Prim believes this new rule will allow millions of people to qualify for loans and mortgages that would be otherwise out of reach.
“Fannie Mae and Freddie Mac do have minimum credit score requirements for some of their loan programs, so this could mean that more people could potentially qualify for those programs,” said Prim.
If you are unsure what your credit score is or if you’ve been turned down previously, Prim suggests talking to a loan specialist.
“A lot of people are frightened to go into a bank and apply for a loan or a mortgage, but there’s really nothing to be frightened about,” Prim said.
Prim says your credit score is just one of many factors that impact qualifying for a loan. Getting pre-approved is a good place to start.
