There is a common misconception that medical collections do not impact a consumers ability to purchase a house.
The truth is ANY collection reported to your credit impacts your overall credit scores. Your credit score is one main factor lenders look at to approve a mortgage loan.
If a medical collection is removed, that will be one less derogatory item on your credit report, which will result with an increase to your score. This increase could put you in a position where you may now be able to qualify for a mortgage.
Even if you are already approved for a loan, imagine where your scores could be at if less derogatory information was reporting to your credit. This again can result with a higher credit score, which can give you access not only to an approval, but access to lower interest rates. The lower your interest rate is, the lower your monthly mortgage payment will be. This can result in thousands of dollars in savings over the lifetime of your mortgage.
If you’re planning to apply for a loan, be sure to keep in mind that medical collections DO impact your credit score, which can impact your ability to qualify for the loan.
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*The information in this article has been provided strictly for educational purposes.