BETTER KNOW THE SCORE

As credit has become more and more prolific in our society, your Credit Report, and thus your Credit Rating, has become more and more important in your daily life.

Your Credit Rating affects all aspects of your financial life when it comes to borrowing money. Your Credit Rating also has the ability to affect the job you get, the Apartment you rent, and even if you are able to open an Account at a certain Bank or not.

It looks like lenders, landlords, insurance companies and employers aren't the only ones interested in credit scores these days - now the health industry is getting in on the act.

 

Credit industry giant Fair Isaac is working with Healthcare Analytics and Tenet Healthcare to create a new "MedFICO" score. This new credit score is intended to judge a person's likelihood of paying their medical bills and could debut as early as this summer.

Understandably, the new score is already raising concerns from consumer advocacy groups that fear it will be checked before patients are treated. They are afraid that people with low medical credit scores could receive lower-quality care than those with a higher MedFICO.

According to Stephen Farber, chairman and chief executive of Healthcare Analytics, that will not happen. Hospitals will check the score, which will be based on the patient's medical bill payment history, only after the patient is discharged.

And under the Fair Credit Reporting Act, hospitals and doctors may report health care debts to credit reporting agencies but cannot indicate what they were for. Hospitals generally do not report delinquent accounts, but they do turn them over to collection agencies. In such cases, only the medical provider's name and the amount owed should be listed. And even then great care must be taken so as not to reveal the type of care given, as would be the case with the Betty Ford Clinic, which is widely known for treating drug and alcohol addiction.

But can they be trusted?

Given the problems with the Credit System in general - such as Identity Theft and inaccurate Scoring Data - Consumer Advocates question whether or not this information should be used as the basis for a new Medical Version. In an analysis of more than 500,000 individuals' credit scores, the Consumer Federation of America says 29 percent were 50 points lower than they should have been.

They ask, "What's going to happen if there's a mis-scoring due to clerical error or when there are two people with names like Bob Jones who have similar numbers?" Insurance companies are already using a person's credit score to determine their premiums now.

What's going to stop Health Insurance providers from doing the same thing once the new MedFICO score is available?

If you ever doubted the importance or legitimacy of your credit score being as high as possible, this should be your wake up call!

The good news is that your Credit Report is a working document. This means that you have the ability, over time, to increase your Credit Score. Most things stay on your Report for up to seven years.

After seven years they drop-off of your Report and no one can see that they ever even existed. By paying your bills on time, each month, you can have a good Credit Report as time passes. And, if your Credit has some old negative marks on it, then over time they will drop-off and leave your last seven years of better Credit!

Learn More About Credit Scoring and Credit Repair