Q:
Hi I have some medical collections on my credit report and was wondering if this will affect me getting a car loan. I have not pulled my credit report yet so I am not sure what my scores are, but know the debt I owe is around $2500 for a surgery I had. What type of credit scores are auto lenders looking for? What is considered a good credit score for auto loans?

James

A:
Hi James,
I am not sure if your medical collection was the result of the hospital not coding something correctly so your insurance would pay. I do know that this is a common problem if you have insurance. The insurance claim was coded wrong; therefore the insurance company would not pay. If this is not the case, yes any collection hurts your credit report. This negative mark on your credit report reports every 30 days. My suggestion would be to settle on it, so the balanced owed goes away. Typically car dealerships are able to get low credit scores financed, but you will pay for it. To get the best rates you typically need a credit score of 660 or above.

CreditScoreQuick.com

Q:

I have a tax lien on my credit report from 1998. This tax lien was due to taxes on a 1099 job I had for 2 years. I did not pay the amount owed for the year of 1997. The IRS filed a tax lien for $12,000. My attorney said it should drop off after seven years. Well 7 years was a while back. What am I missing here? I have been told this tax lien will affect my credit score as well. I want to resolve this matter as quick as possible. I am getting ready to sell my home and purchase another home.

Jim

A:
Determining when collections are going to come off your credit report might seem simple, but there are some types of credit report activity that does not apply to the 7 year rule. Tax liens are one of those debts owed that will not go away until you pay it. The Fair Credit Reporting ACT has different rules for this type of debt owed. Here are the facts.

• Unpaid Tax Liens- there is not a set expiration date for unpaid tax liens according to the FCRA. So tax liens will stay on your credit report until you pay it. Some credit bureaus cap how long they report records like tax liens for up to 15 years. So if a tax lien has been reporting for over 15 years, you might consider disputing to see if the bureaus will remove.

• Paid Tax Liens – Once a tax lien is paid off, the tax lien will report on your credit report for 7 years from paid date. Tax liens are the only record where the expiration date is tied to repayment.

Jim you do have a chance of getting this record off by disputing it. There is no guarantee it will com off though. You will more than likely have to pay the debt off. You can use our how to dispute process here.

Mike Clover

CreditScoreQuick.com