Spat can harm credit
WASHINGTON - Like millions of Americans, Ohio State University chemical engineering student Julia Mueller got into a dispute with her private health-insurance company over whether the cost of a medical procedure was covered by her policy.
And like millions of Americans, says Rep. Mary Jo Kilroy, when Mueller lost that argument, she also found that the months-long dispute over a medical debt resulted in a damaged credit rating and a credit card whose interest rate shot up to 25 percent from 7 percent.
Now, Mueller's about to graduate from college, but she is afraid she will get socked with higher interest rates when she tries to buy a home or make other purchases.
Mueller's story illustrates why Kilroy, a Columbus Democrat, says she is pushing legislation that would prohibit credit bureaus from using paid-off or settled medical debt to help determine credit scores. The bill would require that a creditor or credit rating bureau expunge medical debt from a consumer's record within 30 days of the debt being paid off or settled.
