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Reports of unpaid debt can tank an otherwise strong credit score. The new CFPB rule would change that for about 15 million Americans with medical debt on their credit reports.
The three national credit reporting agencies — Experian, Equifax and TransUnion — said last year that they were removing medical collections under $500 from U.S. consumer credit reports.
Removing medical debts from consumer credit reports is expected to increase the credit scores of millions of families by an average of 20 points, the bureau said.
For example, if you have $40,000 credit limit across all of your cards and carry a $4,000 balance to the next month, your credit utilization ratio is 10 percent.
Paying bills on time is crucial to maintain a positive credit score. A consumer's credit payment history accounts for up to 35% of their FICO score, according to myFICO. Keeping track of statement...
Even after insurance, Alvarado still owed in the vicinity of $1,200, which he took several months to pay off. During that time, his credit score dropped to 680, still considered good, but lower ...
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