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Jennifer Trimmer appears to be a healthy, happy woman. But a heart condition that she was treated for a few years ago has come back to haunt her in a way she never expected.

Her story is also providing the pulse for the efforts by one Dallas mortgage banker to change the way credit bureaus hand out credit ratings for millions of Americans. That effort involves a personal journey on his part; a unique do-it-yourself approach to getting Washington’s attention and the impact on federal law.

Jennifer was hoping to take advantage of lower interest rates for a rental property she owns. She began the credit approval process with Rodney Anderson’s company, Supreme Lending. “He ran my credit report and unbeknownst to me, there was a medical collection on there,” Jennifer said. “Here I am, I’m a single woman who has a great job and I make good money. I pay my bills on time, and I thought everything was going great and I wanted to take advantage of the lower interest rate – and I can’t.”

Jennifer ran head-on into a largely unknown barrier in the credit reporting process: any medical debt collection stays on a borrower’s credit report for seven years – even if that bill was ultimately paid or settled, and can wreak havoc on credit scores. The wide variety of providers for medical services can inundate a consumer with documents that may or may not look like bills in the weeks and months after a hospital procedure or doctor’s visit.

“There’s an injustice happening to the American people and we need change when it comes to medical debt on people’s credit report,” Anderson said. “In our studies, it’s affecting over 40 percent of all Americans” by damaging their credit scores.

“When you come out of a grocery store, you’re at a checkout line. When you check out of the hospital, there’s no checkout line. Your bills may not come to you for 90 to 180 days and then they’re really confusing,” he said.

He had heard too many variations on the same story. So Anderson – who hosts a personal finance radio show from his office and is the author of a forthcoming book, “Credit 911″ – decided to get involved by proposing a new law and working to get it passed in Congress.

HR 3421, the Medical Debt Relief Act of 2009, is the result. The legislation would remove paid medical collections from credit reports within 30 days. Anderson believes the law, if passed, would immediately raise credit scores for millions of Americans and pump billions of dollars into the U.S. economy within the first year of its existence.

His work on the Act, which involves hiring lobbyists to find support in Congress for his bill, has cost him a lot of money. Anderson, however, says he has not donated any money to representatives or their political action committees and has refused financial help from individuals or organizations who may have an interest in the issue.

“I didn’t want other people to have a different agenda,” he explained. “It’s a two or three-page bill. We want to keep it simple. We understand that this is a simple solution that millions of Americans need.”

Congresswoman Mary Jo Kilroy (D-Ohio) has introduced the bill in the U.S. House and there are more than 100 co-sponsors. Senator Jeff Merkley (D-Oregon) has promised to champion the bill in the Senate. But it’s taking a lot of work to gather the support, as Anderson and his staff have discovered while getting a crash course in how Washington really works.

“Everyone that we spoke with – whether it be Congresspeople or lobbyists – everyone said, ‘wow, this is a fantastic idea, this is going to help millions of Americans,’ all of that. We met with no opposition in that regard,” said Suzie Reed, Supreme Lending’s Executive Director of Mortgage Operations. “But when we started talking about people backing it, then it was, ‘well, what did so-and-so say’, or ‘is this person in support of it.’  And it was very difficult for me to wrap my hands around it, especially as a mortgage originator who likes things to make sense.”

But Anderson says once he is able to sit down with elected representatives and explain the way many Americans are penalized by medical debt collections, “they say, ‘I get it, I understand.’ Because it’s normally either happened to them, one of their family members or one of their staff members, and then all of a sudden at that point they say, ‘hey, I’m on board.’ We just need more people that we can sit down with and talk to and make sure they understand our message.”

For more information, go to www.rodneyanderson.com/credit/medical_relief_bill.php or www.rodneyanderson.com.

Show Transcript

Renay San Miguel: You can sub title this story Mr. Anderson goes to Washington. A provider of mortgage services finds a glitch in the credit score business, that s keeping people from realizing there dreams of buying a home. It involves medical collections, but what it’s really doing is making lenders and consumers sick. Enter Rodney Anderson in the Jimmy Stewart role, using nearly half a million dollars of his own money to engage in some do it your self law making; he is getting a crash coarse in the ways of DC lobbyist, the realities of politics and how it all effects the average consumer. Rodney Anderson: A medical collection right now, its stays on your credit report for 7 years. What the medical debt act if 2009 will do for you? Is when you pay or settle a medical collection on your credit report, the derogatory item will be removed with in 30 days. Renay San Miguel: Dallas Mortgage Banker, Rodney Anderson, is used to speaking out on issues regarding credit and home loans. Of course it helps to have his own radio show, broadcast from his offices and a book Credit 911. So Anderson runs a successful mortgage business, but his lengthy effort to reform credit reporting dealing with medical collections is more personal, sparked by stories of homeowners like Jennifer Trimmer. Jennifer Trimmer: I have two properties; one is a rental property that I wanted to take advantage of to get the lower interest rate. So I called Rodney’s office and he ran my credit report, un be notes to me there was a medical collection on there from a heart condition that I had had checked on a few years ago. Suzie Reed: What happens is, when someone has a collection that was in 05, they find out about it in 2010 and they go pay it. Well the date of last activity on the report, updates to today and then it starts the 7 year clock over. Jennifer Trimmer: I make good money and I am paying my bills on time, I thought everything was going along great and then wanted to take advantage again of the lower interest rate I can’t. Suzie Reed: Its very discouraging, obviously for them, people who have never missed a payment to anyone and have a $20 or $30 medical collection from 5 years ago that drops there scores, and I have to look at them and say “I am sorry your credit score doesn’t meet to requirements to obtain a mortgage loan”. You know I get everything from anger to desperation “well I will pay it, I didn’t even know it was there, if we just pay it can we have our house?” It’s heartbreaking. Renay San Miguel: Anderson had heard enough. To help people improve there credit for buying a house, he’s gone to the U.S. House and Senate and proposed his own bill HR 3421 The Medical Debt Relief Act, that would cut 7 years down to 30 days. He hired lobbyist to navigate the federal making maze. He was armed with stacks about credit reporting mistakes the billions the bill could add to the economy. Yet Anderson’s hand’s on lesson in democracy was just beginning. Suzie Reed: It was our first trip to DC, and everyone that we spoke with wither it be congress people or lobbyist everyone said “Wow this is a fantastic idea; this is going to help millions of Americans”. All of that, we met with no opposition in that regard, but when we started talking about people backing it “ Well what did so and so say, is this person in support of it?” It’s been quite a ride; we’ve enjoyed every minute, and every time we get close to the finish line and something sets back, we re group and keep pushing but, he is not going to take no for an answer, I really think that we are going to be able to get this done. Renay San Miguel: And joining us now is Rodney Anderson, Executive Director of Supreme Lending. Rodney thanks for your time today, we appreciate it. Rodney Anderson: Well thanks Renay. Renay San Miguel: Why go through this work, why take these chances, why fight city hall on the highest level, why did you want to do this? Rodney Anderson: There is injustice happening to American people, we need change when it comes to medical debts on people’s credit report. I don’t feel its fair people have to pay higher rates for borrowing money. Or they can’t get approved to buy a house or buy a car, get a credit card. Let’s face it we don’t ask to have cancer, we don’t ask to get sick we don’t ask to have any problems, but these medical collection show up on people’s credit reports, there anywhere from $1 to $200 to $400, and most people don’t know about it because when you go to a grocery store to check out there is a check out line, when you come out of the hospital there is not a check out line of all the people that have been involved and how much the bill is. You most of the time don’t even know the bill is there from 90 to 180 days. The difference in this bill is there is a 3rd party billing company and that’s what people need to know. Renay San Miguel: You have spent close to half a million dollars of your own money. Rodney Anderson: Yes Renay San Miguel: On the process, you have become a lobbyist for this, in a way, for the issue, but you’re not an official lobbyist right? Rodney Anderson: Absolutely not. Renay San Miguel: You haven’t given any money to any political action comities or any congressman right? Rodney Anderson: Myself, my wife and any member of my family have not. Renay San Miguel: And you have been presented opportunities to take money from individuals and organizations that have an interest in this and you said no. Rodney Anderson: It’s a 2or 3 page bill, we understand this is a simple solution that millions of American’s need. So I didn’t want other people to have a different agenda. Renay San Miguel: Tell me why this has been so hard, we have said before you would think this would be a no brainer, you would be able to get people on both sides of the isle to jump on this. But it’s taking some time to convince some folks, why do you think that is? Rodney Anderson: Well, you convince them when you have the opportunity to sit down with them, tell stories of what people are struggling with and then they say “ I get it, I understand it”. It either happen to them, there family members or one of there staff members. And then all of a sudden at that point then they say “Hey I’m on board”. Renay San Miguel: And some of the people that you are talking to are on key comities right? And they are, it’s by parts and reach here. Rodney Anderson: Absolutely. Key members of congress, key leaders of congress. Renay San Miguel: There might be some sinicism as to how congress works. But you’re saying it can actually happen? Rodney Anderson: I have learned that individuals can move mountains in DC; I’ve learned that if you have a great idea you can get the leaders of our country behind you. The champion in the house wanted to pass, the champion in the Senate wanted to pass, everyone seems to want to have this pass. Renay San Miguel: Okay, we shall see if it will. In the mean time Rodney Anderson thanks for your time. Rodney Anderson: Thank you Renay San Miguel: Good Luck to you. Rodney Anderson: Thank you Renay San Miguel: I am Renay San Miguel for Spark360.