Is Medical Debt Highly Unhealthy for Your Credit Score?

Are consumers’ credit scores unfairly dinged by medical debt? The Consumer Financial Protection Bureau thinks so. The agency released a new report that says unpaid medical debt sent to collections – and appearing on credit reports – can overly penalize consumers. Credit scores, generated by information in credit reports, are three-digit numbers that try to predict a consumer’s likelihood of paying bills. The higher the number, the better. Businesses use scores to decide whether to extend credit and at what interest …

Some Student Borrowers Face Default if Cosigner Dies

Many parents and grandparents are aware of the hazards of cosigning an education loan, putting themselves on the hook to repay if the student doesn’t. Now another wrinkle has emerged that can end up hurting student borrowers: Under the terms offered by most private lenders, institutions can demand that borrowers immediately repay a loan in full if the cosigner dies or files for bankruptcy. These so-called auto-defaults can occur even if the borrower has been keeping up with payments. And …

Defaults Rise in Parent PLUS Loans

Parents who’ve taken out federal student loans to help pay for their children’s college education are increasingly finding themselves in serious financial trouble. Default rates on Parent PLUS loans have tripled in the last few years, according to federal data released this month. Some 5.1 percent of loans that originated in the 2010 fiscal year were in default three years later, according to U.S. Department of Education data released last week. Default rates were highest, at 13.3 percent, for Parent …

Rate Reset for Some Homeowners May Trigger Defaults

The home foreclosure crisis that swept through the nation during the Great Recession may not be over for thousands of troubled borrowers. Some homeowners who sought help from the government’s Home Affordable Modification Program (HAMP) are about to see their mortgage payments rise this year. In some cases, those payments could eventually go up by more than $1,000 a month, according to the Washington Post. The loan modification program lowered monthly mortgage interest rates for some 1.3 million at-risk homeowners …

4 Facts You Should Know About National Debt and Default

In all of the turmoil about a possible U.S. default on its $16.8 trillion debt, there’s an overload of information to follow. Here are four tidbits that you might have missed. Sign up for the AARP Money Matters newsletter 1. China does not “own our debt.” Yes, it does hold an IOU from the United States for about $1.28 trillion, making China Uncle Sam’s largest overseas creditor. But that represents only 7.6 percent of the nation’s debt. 2. The U.S. …

Will the Fiscal Crisis Ensnare Social Security and Medicare?

Not again. It looks as if cuts in Social Security and Medicare may soon be pulled into the budget battles now under way on Capitol Hill. In an op-ed piece in today’s Wall Street Journal titled “Here’s How We Can End This Stalemate,” House Budget Committee Chairman Paul Ryan (R-Wis.) describes changes in the two programs as “vital.” Sign up for the AARP Money Matters newsletter “Let’s negotiate an agreement to make modest reforms to entitlement programs and the tax code,” …