However, FHA, VA and Sub-Prime underwriting does not require medical collections to be paid. If you are looking to GAIN FICO, the rules still apply. Look at the date, look at the debt. If you had medical insurance, you need to get busy and find out why it wasn't paid, get the claim properly filed with the insurance company and get it paid. If it is legitimate, not covered by insurance and within the two year window, pay it. This lost FICO® could mean the difference between getting a 6% rate and getting a 9% rate.
"AUTHORIZED SIGNER" STATUS
If you are the authorized signer - not borrower, joint or cosigned - on an account that is derogatory, you can very quickly regain lost FICO. An authorized signer is designated with an "S" next to the creditor. As an authorized signer you are not responsible for either the balance or the derogatory information on the card. By removing your name as an authorized user, you now remove the item from your credit report! Instant FICO.
THE RIGHT WAY TO DISPUTE ACCOUNTS
Once you've gone through your credit report and you have settled all of your collection accounts, now it's time to clean up the rest. The speed any of this occurs is directly correspondent to the speed you address it! If you're fast enough, you will see the results in FICO® score (for the accounts you've paid) within the next months reporting cycle!
For each collection account you've paid, review your credit report and send a letter of payment in full (a semi dispute letter) along with your proof of payment to each of the the reporting agencies (agencies are defined as - experian, trans union and equifax) in which the collection is listed. DO NOT SEND this information to a reporting agency that does NOT report the debt. Typically, the collection agency will automatically report the payment in full the next reporting cycle (typically every 30 days). This step just insures it gets done!
For each collection account that is a DUPLICATE of an account you have settled, send a letter of payment in full (a dispute for duplicate listing) along with your proof of payment in full to each of the reporting agencies. Again, DO NOT SEND this information to a reporting agency that does NOT report the duplicate listing. This should occur naturally, but this insures it's addressed the first time!
For medical accounts, if they should have been covered under your medical insurance, or you simply do not agree, it does NOT hurt to send in a dispute letter for each of these. You may get lucky and get one or two removed.
If you dispute any account, only dispute with legitimate cause. Never dispute legitimate debts. Just the fact they are noted disputes will give any underwriter the opportunity to over look the debt with good documentation and/or a satisfactory letter of explanation.
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