First the story, then the point. It’s important, so stay for it.
Here’s the story. My step-son is trying to buy a house with his partner and because he’s a 30-something, he’s totally screwed. Housing costs are insane – totally insane. He tells me that he now gets how his generation is screwed – totally screwed.
Since we have good credit – homeowner, modest mortgage debt (with a modest home whose value has gone up insanely,) pay off our credit cards monthly – said we’d co-sign their loan. That’s what parents do – at least privileged parents like us.
I filled out the forms and sent them off. Two days later, he calls and says the bank offered them a higher interest rate because of my lower credit score. Huh? I went online to get my FICO score and it looked fine. The bank sent me the credit report that they got from a credit company (yet another layer) that included data from the big three credit agencies (Experian, TransUnion, Equifax) and pointed me to page 6.
Now, I’ve spent some torturous days with page 6 – so far. On page 6 is an unpaid bill of $153 that had been sent to a collection agency (above.) News to me. I called the collection agency to find out what it is and learned that it was from an internet company called Centurylink from January 2020. That was all they knew and that they no longer owned the debt. It had been transferred back to Centurylink.
They no longer “OWNED” my debt! This is the debt that is making it more expensive for my step-son to take out a mortgage. My $153 non-debt is traded around like an old car, or crypto-debt or ?
Pause for an important fact: I had never heard of Centurylink and I’ve had the same internet provider for 10 years (until last week when we switched to ATT because they now have fiber optic right to our door.)
So I called Centurylink and after a million tries I finally spoke to someone who said their system was down and that I should send a signed letter to get them to remove the bad debt from my record. And to call back the next day.
I sent the letter and called Centurylink again the next day as instructed. Finally getting through (wasn’t easy) and after telling my story (again) the person on the phone chatted with her people and came back to tell me – in no uncertain terms – that they no longer OWNED my debt that it had been sold to a debt collection agency (the one I’d already spoke to.) She gave me the number of the agency. It was wrong so I looked up the right number and… guess what?
They told me – in no uncertain terms – that they no longer OWNED my debt, that it had been recalled by Centurylink – earlier this month (a coincidence?)
I dialed back to Centurylink and said I wanted to speak to a supervisor, but was told – in no uncertain terms – that their system was down and they couldn’t do anything until Monday.
How does the story end? Wish me luck if I can get ownership of my $153 non-debt!
Now here’s the point.
This morning’s NYT reported that the three big credit reporting companies will start eliminating certain kinds of medical debt from their credit reports and scores.
It’s a good thing wrapped in a horrible package.
The package should be obvious. Medical debt!? You get cancer, you have an accident, break a leg, have diabetes, etc. and the bonus prize is suffocating debt. Debt that hangs on like my $153 non-debt in your “permanent record” (not the permanent record they warned me about in grade school if I got bad grades or cheated on a test.)
Debt that makes it harder – perhaps impossible – to buy a house, to help your kids pay for college, to rent an apartment (“bad credit, sorry, we gave the apartment to someone else,”) and the list goes on.
The bottom line: there should be no such thing as “medical debt” in a civilized society.
None at all.
But there’s another part of the horrible package. Once something gets in your “permanent credit record” it’s damn hard to get it out even if it’s wrong. I’ve spent hours on the phone struggling to hold my ire at the worker on the other side of the phone (they’re just the messenger, doing their job. At least Centurylink’s call center workers are represented by a union – CWA. I asked.)
The other bottom line: these financial institutions just have too much damn power.
Oh, and by the way, the reason they are removing some bad medical debt from credit records is because a few weeks ago the Consumer Financial Protection Bureau said it would scrutinize the companies’ treatment of medical debt and would consider an outright ban on including all medical debt in credit reports. Yes, elections matter, even if we can’t get Medicare for All - yet.
Yep, a good thing to preempt an even better thing (but still in a horrible package.)
The song section:
I found James Keelaghan through a project he did with Karine Polwart. He introduces his 2009 song, House of Cards, in this video saying “this song is for anyone who had retirement savings.” I love it.
Stay tuned.
Donald