It’s very common for a mortgage loan applicant to find out during the mortgage loan process that they have one or more adverse medical collection accounts showing up on their credit report. As you can imagine, learning the art of removing medical collections from credit report might be of some value. Although most lenders are not concerned with these accounts, they can negatively affect your credit scores which in turn will keep your mortgage loan request from being approved. If you will follow these very specific step-by-step instructions, you can very quickly have those accounts removed completely from your credit report, many times within 24 hours of making the dispute as instructed. I have personally done this with my wife’s credit bureaus with a few medical collections, so I know it works.
As things stand with current mortgage loan guidelines, FHA and VA loans require a 580 minimum score (FHA 550 in some cases), while conventional loans and USDA require a 620 minimum score. Most Down Payment & Closing Costs Assistance programs also require a 620 minimum score regardless of which type of loan is used (meaning even if your loan is FHA or VA but you want to use assistance, you must have a 620 minimum score).
How to Remove Medical Bills from Credit Report – Step 1
First things first…..sign up with Credit Karma (CK) at https://www.creditkarma.com/ for your individual account. If you have someone else that you have joint credit with, have them create their own account. This FREE site is great at helping you monitor your credit info and scores for TransUnion (TU) and Equifax (EF). Experian (XP) does not participate in CK and I’ll explain more about that later. The scores that CK shares with you, and only you, are not usually what your actual credit bureau scores are, however, the site is great for monitoring activity on TU and EF and they have a mobile app as well so you can access it anytime/anywhere. Although CK is a free site, they will still try to offer you all kinds of fun things that cost money…..DON’T DO IT because YOU DON’T NEED IT.
VERY IMPORTANT: DO NOT DISPUTE ANY ACCOUNTS WITHIN CREDIT KARMA. DO NOT FOLLOW ANY LINKS TO OTHER WEBSITES, INCLUDING THE INDIVIDUAL CREDIT BUREAUS WITHIN CREDIT KARMA TO DISPUTE YOUR NEGATIVE ITEMS. FOLLOW MY INSTRUCTIONS BELOW TO THE LETTER BECAUSE THAT’S THE ONLY WAY THIS WILL WORK. BE PREPARED TO SPEND SOME QUALITY TIME DOING THIS TOO BECAUSE IT IS TIME CONSUMING AND IF YOU GET INTO A BIG HURRY, YOU WILL BECOME FRUSTRATED. I HAVE PERSONALLY DONE THIS PROCESS ON MY OWN MEDICAL COLLECTIONS ON MY PERSONAL CREDIT REPORTS AND IT WORKED SO GREAT THAT I’M SHARING IT WITH YOU.
Before You Begin to Remove Medical Bills from Credit Report
BASIC INFO TO FOLLOW PRIOR TO STARTING YOUR DISPUTES:
By now, you should be signed up with your FREE Credit Karma account and that was the easy part.
I have detailed instructions for each credit reporting agency below. When you get into the individual bureaus per the links I’ve provided, you will be asked some questions to properly identify yourself so be prepared to answer certain questions on things that only YOU would know the answer. For example, a page will pop up with some questions and multiple choice answers something like this: 1. It appears you have had a car loan with……a. Chase, b. Wells Fargo, c. Volkswagen, d. None of the Above. You will need to answer all the questions correctly to pass the identity test. Some of the questions will be tricky so my suggestion before doing this is have your Credit Karma account open on another device and refer to the credit history on CK to find the answer (remember, CK doesn’t show Experian accounts at all). Once on this question/answer page in each bureaus website, you will have to be quick about responding because if you take too long, you’ll be automatically logged out and will have to start over. All of this is done to protect your identity so don’t get frustrated if this happens. If you can get through all the identity questions with the correct answers, you’ll be taken to the dispute section of each bureau. Please note…..if you happen to fail the identity test, you’ll most likely be directed to another page and will have to make your request via snail mail, possibly email or whatever that bureau wants you to do in order for them to be absolutely sure that you and not a Russian troll (no offense to Russians) are the one accessing your credit so be sure to save all of your email correspondence as you get it.
Once you’re in the dispute section of the bureaus, be sure to use the words NO CONTRACT on every item that you dispute. Don’t go into long explanations, or any explanation…..just choose NO CONTRACT or type out NO CONTRACT in the comments or wherever it is they want you to put your reason for disputing. Each bureau is different, will look different and have different ways of how they do things so take your time. Copy the URL’s provided below into your browser and follow my instructions for each individual bureau:
How to Delete Medical Collections from Credit Report – TRANSUNION (TU)
Link to TransUnion –> TransUnion
Create an account
Verify your identity
Dispute all the medical accounts ONLY.
How to Remove Medical Bills from Credit Bureau – EQUIFAX (EF)
Link to Equifax –> Equifax
Scroll down to dispute info on credit report as shown in the screen shot below.
Don’t get bamboozled into paying for any of their services which will pop up as soon as you get on the page.
Dispute all the medical accounts ONLY.
How to Remove Medical Bills from Credit Bureau – EXPERIAN (XP)
These directions are different, so please follow instructions below:
2. Hit the Request Yours Now! button at the top
3. Fill out the secure form
4. Choose the EXPERIAN report only
5. Answer the identity questions
6. The next page that pops up should have ‘POTENTIALLY NEGATIVE’ on it and will list any derogatory accounts on your report, click on the blue ‘Details’ and a new page will pop up with all your tradelines listed with the option to dispute on each one. DON’T JUST START WILLY NILLY HITTING THE BLUE DISPUTE BUTTON!
7. NOTE: Although Experian is NOT on your Credit Karma account, you should be able to refer to any adverse medical accounts on your TransUnion and Equifax accounts via Credit Karma and figure out which ones on Experian are the medical accounts….you can now hit the blue dispute button on those accounts.
8. The next screen that pops up will have this on it, choose the Free Membership:
9. Complete the registration form and hit submit, you’ll see this, click on Continue to Dispute Center
10. You’ll see this, agree to the terms and continue:
11. You’ll see this but with your own name of course, click the blue Start New Dispute button
12. On the left side of the page, you’ll see the potentially negative accounts that you’ll need to determine which ones you want to dispute.
13. This will be at the top of the page:
14. Click on the down arrow to choose a reason and pick OTHER REASON and click the blue NEXT button
15. Type in NO CONTRACT in the box and click the blue NEXT button
16. Keep adding accounts to dispute until you’re done.
17. Review the accounts to make sure you are choosing the correct ones and using the correct wording (NO CONTRACT) and the hit the blue SUBMIT DISPUTE button.
18. You will see this purple box on the next page. It will have your report number and dispute date on the bottom (I cut my info off for presentation purposes):
19. You will see other info on this page such as an estimated date of resolution, links to see the rest of your report, etc. You will also see an option to dispute the other two bureaus. DON’T DISPUTE THOSE IN THIS WEBSITE. You will cause your earlier to disputes to be cancelled out.
20. Close out the page and wait to be notified the disputes were done!
Based on my own (and many of my clients’) personal experience, the disputed medical bills will more than likely be removed and in many cases, that’s all that needs to be done to get your scores up enough to qualify for a mortgage loan. Although my own medical accounts were removed almost immediately, and my Credit Karma scores showed activity quickly as well, your actual credit report may not reflect the updated scores anywhere from 30-90 days which is normal.
So now you wait and watch your CK account and your emails for the good news. In the meantime (if you’re wanting to get a home loan), keep making all payments on time, don’t apply for any new credit unless it is a dire emergency (and if your mortgage loan is already progress, CALL YOUR LOAN OFFICER BEFORE DOING ANYTHING), don’t let anyone pull your credit and stay on top of the updates you get from Credit Karma. Once you get notice that the disputes are done, contact your Loan Officer and give them an update (if applicable).
One more piece of great advice I’m going to leave you with…….DO NOT DECIDE ONE DAY TO PAY OFF ALL OF YOUR OUTSTANDING COLLECTION ACCOUNTS. Believe it or not, this can cause more damage than just leaving them alone. Once an account is posted for collection or charge off, the time clocks starts ticking. After seven years, that account will fall off your report. If you decide that you’re going to just pay it off and send a check, you’ve effectively started the time clock all over again and it will be another seven years before that accounts drops off your report. Worse, it will cause you scores to drop, maybe significantly.
If you need further help and/or advice on your credit history beyond simple disputing, I’ll be more than happy to look at your reports, but you will have to provide them to me unless I have already pulled them for your own mortgage loan. There will be times when bankruptcy is the only feasible option but that is a last resort. A BK will remain on your credit history for ten years as a public record and then it will fall off. However, if you keep your credit history clean and slowly rebuild your credit (DO NOT GET ANYMORE CREDIT CARDS!!!), you’ll be given credit by auto lenders, banks and yes, even mortgage lenders. We only require that your BK be discharged for two years for conventional loans and only one year for FHA and VA loans. If you have a BK on your history and aren’t sure if you’ll qualify for a mortgage, call me, we will figure it out!
I was given this valuable info as a gift from someone that did this for a living and all she has asked is that it is shared as much as needed. If you feel this information has helped you, please share it!
NECESSARY DISCLOSURE: I am NOT a licensed credit repair specialist, nor have I ever been one. I do not charge for this information nor are you obligated in any way to use this information or use my services as a mortgage loan officer if you use this information. You are solely responsible for any action you take regarding your own credit reports. There are times when an expert is needed and if that’s your case, I’ll be more than happy to refer someone to you.
If you need credit repair beyond the medical collections, Do it Yourself Credit Repair Software is a great option –>CREDIT REPAIR SOFTWARE
If you prefer professional credit repair, go here –> PROFESSIONAL CREDIT REPAIR
Best of luck,