Otherwise well-qualified borrowers with good loan-to-value ratios and steady employment are increasingly finding it difficult to refinance because of medical billing mistakes marring their credit, say mortgage bankers and real-estate agents.
Rodney Anderson, executive director of Supreme Lending, a mortgage bank in Plano, Texas, calls medical debt the single biggest roadblock for would-be refinacers. “People have no idea that they still owe small amounts which later end up on their credit report,” he says.
A bill wending its way through Congress could provide relief for homeowners with medical-debt troubles. The Medical Debt Relief Act, which passed the House this fall and is now in the Senate, would remove settled medical debt from credit reports after 45 days, instead of the customary seven years.
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The best course of action you can take is to check your consolidated credit report at least twice a year and check for any hidden financial surprises or unknown bills that might derail your credit. You can click here for the consolidated credit report I use.