Actually you are in a good position since this is the only negative on your husbands report.
I don't think that a credit reporting agency can lawfully generate a report with medical information on it nor can
a creditor use medical information in the determination of eligibility for credit.
Here is my argument:
Read this
decision posted by Roybean. Pay very close attention to the Courts' reasoning. Read carefully pages(s) 12954-12958.
Section 604(g) of the FCRA states:
(g) Protection of Medical Information
(1) Limitation on consumer reporting agencies. A consumer reporting agency shall not
furnish for employment purposes, or in connection with a credit or insurance
transaction, a consumer report that contains medical information (other than
medical contact information treated in the manner required under section
605(a)(6)) about a consumer, unless--
(A) if furnished in connection with an insurance transaction, the consumer
affirmatively consents to the furnishing of the report;
(B) if furnished for employment purposes or in connection with a credit
transaction--
(i) the information to be furnished is relevant to process or effect the
employment or credit transaction; and
(ii) the consumer provides specific written consent for the furnishing of the
report that describes in clear and conspicuous language the use for
which the information will be furnished; or
(C) the information to be furnished pertains solely to transactions, accounts, or
balances relating to debts arising from the receipt of medical services,
products, or devises, where such information, other than account status or
amounts, is restricted or reported using codes that do not identify, or do
not provide information sufficient to infer, the specific provider or the
nature of such services, products, or devices, as provided in section
605(a)(6).
(2) Limitation on creditors. Except as permitted pursuant to paragraph (3)(C) or regulations
prescribed under paragraph (5)(A), a creditor shall not obtain or use medical
information (other than medical contact information treated in the manner
required under section 605(a)(6)) pertaining to a consumer in connection with any
determination of the consumer's eligibility, or continued eligibility, for credit.
The term "credit transaction" is defined as: "the right granted by a creditor to a debtor to defer payment of debt or to incur debts and defer its payment or to purchase property or services and defer payment therefor."
A mortgage would fall under the term "credit transaction". In order for a credit reporting agency to have the lawful right to generate
a credit report that would show a medical collection account, the CRA would have to comply with 604(g).
We know that you are not going to consent under 604(g)(1)(A). 604(g)(1)(B) can be a little troubling, especially the "or" in (ii) as it applies to (C).
But look at 604(g)(2). A creditor cannot use the information.
It might be worth your time to run this by a consumer attorney in your area.
