We had a great discussion last month on the different things we had heard about credit, but didn't have any concrete sources. I was able to find further information on some of the points we talked about, but if anyone has further experience or resources that we can reference, please share by commenting on this post! Below is a recap of what we discussed:
I heard that different types of bankruptcy stay on your
credit report for different lengths of time – either seven or ten years.
During our discussion, multiple people had heard this
information. Short of scouring through
the text of the Fair Credit Reporting Act, I found a bankruptcy blog by a Texas
law firm. In short, the FCRA does not
distinguish between the types of bankruptcy and it states that bankruptcy
information cannot be reported after 10 years from date of filing. However, credit reporting agencies will often
choose to report Chapter 13 bankruptcy for only 7 years. See the Texas
Bankruptcy Blog for more information.
I heard that medical collections are not considered when
purchasing a home.
All collections negatively affect credit scores, including
medical collections. However, I have
also heard that medical collections are not seen as negatively as other
collections, but I do not have any documentation to back that up. There is an article in the Union
Plus about medical debt.
We have a few volunteers who are realtors or work for
lenders. I invite you to share your experience
in working with people who have medical collections and are trying to buy a
home.
We also discussed student loans and how they affect
credit.
Again, all collections negatively
affect credit scores, including student loans.
The important thing here is that borrowers continue to work with their
lender or guarantor (if the loan is in default). A great resource for information about
student loans is the Texas Guaranteed
Student Loan Corporation.
October Continuing Education gathering
The next gathering will be on Wednesday,
October 19, 12-1 pm at the Community Financial Center. Bring your lunch and learn about 2-1-1 Texas,
the program of the Texas Health and Human Services Commission that is committed
to helping Texans connect with the services they need. Bridgette Kern, a
representative from 2-1-1 will be giving an overview of 2-1-1 and the services
they provide. She will also demonstrate how to use 2-1-1’s online database. Sign up on MyVolunteerPage.
Thanks everyone for participating and I hope to see you on the 19th!
Erika Leos
Financial Coaching Coordinator
