Article from CBS 11

New Bill Could Help Consumer Credit, Economy

40 Percent of Americans have unpaid medical collections that are damaging their credit scores

FORT WORTH (CBS 11 / TXA 21) ―Fort Worth resident Yancy Qualls is one of the

thousands of Americans who have suffered the impact of unpaid medical collections. It’s an issue that Dallas analyst Rodney Anderson said affects close to 40 percent of Americans, and it is the only thing holding Qualls back from buying a new home.

“The credit scores were in the 500s,” Qualls said. “You need 620 to qualify to get a mortgage these days, which I didn’t really know.”

The collections were by no means substantial: The most expensive unpaid medical payment was $326, which stemmed from gastric bypass surgeries he and his wife had years ago. Looking at the bill for another unpaid collection, after a $36 discount, Qualls owed just $84.

“This is not a bill,” he said. “I didn’t know late payments for medical bills stuck around for seven years.”

Financial experts estimate that about half of Americans haven’t checked their credit in the last year. Just like Qualls, they won’t recognize that they have unpaid medical collections until they apply for a loan – and are denied.

“People’s credit ratings are being destroyed over medical collections,” Anderson said. “Five dollars. Five dollars ruins your credit score.”

So Anderson came up with a solution, and drafted a bill that went before the U.S. Congress last year. The Medical Debt Relief Act of 2009, H.R. 3421, would remove paid medical collections from credit reports in 30 days.

Anderson said he drafted the bill because he understands how confusing the web of paperwork applied to medical payments can be. Ordinary people are in the market for large purchases like homes or automobiles and are being rejected because of unpaid medical collections. Anderson believes its impact would expand beyond the individual.

“It is going to have a big impact on this U.S. economy,” Anderson said.

Qualls would be one citizen directly affected by the bill, and said he would pay the outstanding charges immediately.

“It’s the difference between being able to buy a new house or not,” he said.

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