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#2142465 - 08/17/17 06:58 PM Not sure about this denial reason
mdog76 Offline
Platinum Poster
Joined: Jan 2007
Posts: 645
Officer denied applicant for have delinquent past or present credit. When I look at the credit report, all of the unpaid appear to be medical based on what the credit reporting agency has told me. Can we get into trouble if we based a denial solely on medical debt?

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Fair Lending
#2142518 - 08/17/17 09:41 PM Re: Not sure about this denial reason mdog76
Rocky P Offline
Power Poster
Joined: Jun 2003
Posts: 7,460
Florida
What does your loan/underwriting policy say, and do you look at it the same way for all applicants?
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#2142538 - 08/18/17 11:04 AM Re: Not sure about this denial reason mdog76
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 80,341
Galveston, TX
You are not allowed to treat medical debt any different that any other debt. As long as anyone that applies with that same credit history would get denied, there is not a problem.
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#2144655 - 09/01/17 03:53 PM Re: Not sure about this denial reason mdog76
InFairness, CRCM Offline
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InFairness, CRCM
Joined: Nov 2010
Posts: 704
USA
Many lenders do treat medical debt differently than other debts. It depends on what your credit policy says.

A CFPB study found that medical debt excessively penalizes consumers relative to other debt. http://files.consumerfinance.gov/f/201405_cfpb_report_data-point_medical-debt-credit-scores.pdf

The major credit bureaus have also changed how they treat medical debt and related disputes. http://www.cdiaonline.org/ConsumerInfo/content.cfm?ItemNumber=11156
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#2144690 - 09/01/17 05:42 PM Re: Not sure about this denial reason mdog76
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 80,341
Galveston, TX
Many lenders do treat medical debt differently than other debts.

Hopefully not less favorably in violation of the FCRA:

The creditor uses the medical information in a manner and to an extent that is no less favorable than it would use comparable information that is not medical information in a credit transaction; and
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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