Debts that unsettle the score

[p-]

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@John1956 wrote:

Not a means to dodge the medical bills. The proposed law would allow deletion of those accounts that ARE PAID. *ONLY* those that are paid, and that are $2500 or less.

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Oh, right.  I should read the whole thread before commenting.  

Guess it IS a win-win.  Might even result in more people paying their medical bills.  Ok, you got my vote.

[valley_man0505]

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@p- wrote:

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@John1956 wrote:

Not a means to dodge the medical bills. The proposed law would allow deletion of those accounts that ARE PAID. *ONLY* those that are paid, and that are $2500 or less.

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Oh, right.  I should read the whole thread before commenting.  

Guess it IS a win-win.  Might even result in more people paying their medical bills.  Ok, you got my vote.

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Exactly...MORE bills would end up getting paid.  I will admit that I have 2 medical collections on my credit reports and I have no intention of paying them unless they get removed as a result.  Not trying to duck on my bills--if I had enough extra money sitting around, I would pay them.  However, I have a lot of other things to pay for right now, and things that DON'T help my credit are not high on my priority list.  If these would get deleted, they would immediately move to the top of my priority list.  The 2 medical collections are the ONLY baddies left on my report, so having these removed would be a HUGE incentive for me to pay them.  Right now, there really isn't any incentive to pay them.

I still can't understand why anyone would be against this bill.  What am I missing?

[John1956]

In my opinion, those who are more in favor of the business world would be against it. Those who are more in favor of labor would be for it. The voting results from the last attempt at this type of new law bears this out. I actually did spell it out by naming which party was which. However, my post was edited because of the policy against being political.  I will take a chance and state it *this way*: Edited would be against it. They want to punish those who haven't paid all of their bills all of the time, because they favor the business ownership (who did not get paid).

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Nothing has changed about making a political statement. Few things can heat up a thread faster than placing blame on one group or taking the side of one particular political philosophy over another. That's why all political talk is stopped before it gets started.

MarineVietVet, myFICO moderator

[p-]

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@John1956 wrote:

In my opinion, those who are more in favor of the business world would be against it. Those who are more in favor of labor would be for it. The voting results from the last attempt at this type of new law bears this out. I actually did spell it out by naming which party was which. However, my post was edited because of the policy against being political.  I will take a chance and state it *this way*: Edited would be against it. They want to punish those who haven't paid all of their bills all of the time, because they favor the business ownership (who did not get paid).

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Nothing has changed about making a political statement. Few things can heat up a thread faster than placing blame on one group or taking the side of one particular political philosophy over another. That's why all political talk is stopped before it gets started.

MarineVietVet, myFICO moderator

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That doesn't make sense; the "in favor of business" people ultimately answer to their base, which would be the insurance, hospitals, and payers.  If it's a win win for all of those people, the lobbying efforts would be in favor of the bill.  There must be something more that we're missing in the bill that would make it less than favorable to that base.

[p-]

From what I can find on Google, the last version of this bill didn't make it through the senate; the lame duck session failed to take up the issue and get it done.  The new version has bipartisan report, but does meet some opposition when it comes to the CRA's themselves, and their customers.

Apparently banks do want to know who pays their bills before they lend them money, even medical bills.  I guess it stands to reason they would rather have the information, and decide for themselves whether to consider it, than not see it at all.

Bipartisan report:

http://www.insidearm.com/daily/medical-healthcare-receivables/medical-receivables/medical-debt-respo...

But here's who might be against it:

'Fair Isaac, for its part, recently posted a blog that warned against "subjective tinkering" with credit scores. "When lenders … are prevented from seeing these negative records," the company said, they "are likely to loan to borrowers who are riskier than they appear."'

http://articles.latimes.com/2011/jun/19/business/la-fi-harney-20110619

[John1956]

Again, from my perspective, it's still the same thing. The "Working Class" would like it. The "business class" would not.

Also, if you look at the individual votes on HR 3421 from the last session of Congress, those results will tell you alot.

[valley_man0505]

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@p- wrote:

From what I can find on Google, the last version of this bill didn't make it through the senate; the lame duck session failed to take up the issue and get it done.  The new version has bipartisan report, but does meet some opposition when it comes to the CRA's themselves, and their customers.

Apparently banks do want to know who pays their bills before they lend them money, even medical bills.  I guess it stands to reason they would rather have the information, and decide for themselves whether to consider it, than not see it at all.

Bipartisan report:

http://www.insidearm.com/daily/medical-healthcare-receivables/medical-receivables/medical-debt-respo...

But here's who might be against it:

'Fair Isaac, for its part, recently posted a blog that warned against "subjective tinkering" with credit scores. "When lenders … are prevented from seeing these negative records," the company said, they "are likely to loan to borrowers who are riskier than they appear."'

http://articles.latimes.com/2011/jun/19/business/la-fi-harney-20110619

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If that is the argument, fine.  However, there is a real simple solution--show it, but DON'T include it in the FICO scoring formula.  That is the issue I have--CAs act like they are doing a big favor by updating to "paid, $0 balance" status, but that is only a benefit during a manual review since a $0 collection has the same effect on the FICO score as a $10,000 collection.  In today's world where everything is electronic, many credit applications get thrown out automatically just because they don't meet a minimum FICO score requirement.  It doesn't matter WHY the score is low--if it is below their requirement, you don't qualify.  I can see the need to "punish" people for not paying bills, but you shouldn't be punished "forever" (ok, 7 years) for medical bills.  You should have a chance to right the wrong with medical bills since you never know what can happen and when.  Also, MANY unpaid medical bills are the result of bills that were never received, or were confusing, etc.--not because people were deadbeats.

[John1956]

I agree 1000% !!!! There are ALOT of problems with medical billing. You know that this is true if you have ever tried to get one straightened out

This is one of those situations that fits in with the concept of "the SPIRIT of the law", vs "the LETTER of the law".

[MarineVietVet]

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@John1956 wrote:

Again, from my perspective, it's still the same thing. The "Working Class" would like it. The "business class" would not.

Also, if you look at the individual votes on HR 3421 from the last session of Congress, those results will tell you alot.

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Now that is an excellent way to get your point across. Bravo!!

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".