Lenders say medical debt issues hurting borrowers

Mortgage bankers say that medical debt issues - sometimes unknown to consumers - are throwing a monkey wrench into many potential home sale and refinance applications, as they drag down borrowers' credit scores, according to the Wall Street Journal.

The Journal cites data from the Washington, D.C.-based nonprofit Commonwealth Fund, which says that medical debt errors have created issues on the credit reports of roughly 14 million Americans.

One borrower told the WSJ that her credit score had plummeted 77 points from 757 to 680 because of two $11 bills from a chiropractor's office, which had been issued in error and turned over to a collection agency.

"Don't assume that your credit score is pristine, and be vigilant about checking it for these medical bills," Mark Rukavina, executive director of the Access Project, a Boston-based health-advocacy group, told the paper. He added that after visiting a doctor or hospital, it may be prudent to call them back soon after to make sure everything has been paid.

Credit scores continue to be an issue for those looking at Houston homes. A report from CreditKarma.com found that the city's average credit score fell 5 points during the third quarter of the year from 667 to 662.