Personal Loan rejected due to negative PAID Medical record

[Anonymous]

This is for a personal loan, not a mortgage, but there isn't a forum for personal loans. 

I applied for a personal loan from a bank.  I have unpaid medical bills I'm trying to conslidate.  I managed, without a loan, to get all the ones on my credit report paid off.  I challenged several and got all but one removed from my report.  All 3 agencies refused to remove it as they stated it's marked as "isMedical" so it shouldn't be counted against me by banks.  This one bad collection record, that's marked as PAID but still on my report, caused a big national bank to reject my loan, since my FICO barely qualifies for the loan. 

It was my understanding banks weren't allowed to take Medical collections into their calculations for rejections. Am I wrong in this assumption? Do I have any recourse? 

[jadeite788]

I think it depends on how recent the collection is. 

[pizzadude]

There's no law that excludes medical collections. Only the most recent version of FICO scoring excludes "nuisance" medical collections under $100.

[pizzadude]

Moved to general credit topics

[Anonymous]

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@pizzadude wrote:
There's no law that excludes medical collections. Only the most recent version of FICO scoring excludes "nuisance" medical collections under $100.

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They don't factor any collections less than $100, not just medical.

[pizzadude]

Thanks for the clarification Guiness !

And just to add, collections will have a negatively score impact regardless of whether they are paid or unpaid. Or to put it another way, paying collections won't help your score.

[Anonymous]

Well wish I'd known that before I spent all that money getting it marked as PAID.  Glad the others I spent money on getting set to PAID I could dispute off. I could have spent that money on the ones not marked for collections yet, and then not needed the loan.