Rescinding an acceptance because of bad credit?

[TripleDegree]

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If you guys are not aware, there is a bit of a furore in the Pre-allo forum - about someone who was accepted but then rejected because of *1* unpaid bill that showed up on his credit report.

does this sound right? Any thoughts here?

 

[fuzzyerin]

It sounds more like a problem with financial aid - I can't imagine they'd recind an acceptance, but they could not give him aid, which in turn may limit his ability to pay for medical school. Not a recinding of the acceptance, but merely his/her inability to pay for the school would prevent the person from accepting the acceptance. That's possible, I suppose. (I hope that makes sense...)

 

[G0S2]

If you guys are not aware, there is a bit of a furore in the Pre-allo forum - about someone who was accepted but then rejected because of *1* unpaid bill that showed up on his credit report.

does this sound right? Any thoughts here?

I know that on the G-town application, it states that there will be a credit check.

 

[Old_Mil]

Increasingly, employers are looking at credit reports as part of the hiring process. Insurance companies are looking at credit reports when they quote rates to customers. I've never heard of a college/university looking at one as a condition of acceptance however.

The error all these institutions are making is that they are equating bad credit with unreliability as an individual. This may or may not be the case. A variety of circumstances can ruin the credit of an otherwise exemplary individual - job loss, divorce, an unreliable spouse, and so on.

Hopefully, intelligent people will realize this and discontinue the use of credit reports as a barometer of something they were never intended to measure. Barring that epiphany, if I found myself in a situation where a university rescinded an admission based on a credit report, I'd sue them for their endowment and retire to a hammock on an island where beautiful young women in grass skirts brought me drinks with umbrellas in them.

 

[Khenon]

I think this all got blown out of proportion (and I was one of the people that totally freaked about this). Apparently there are a couple (just a couple!) of schools that do require credit checks as part of your acceptance. I guess they are up front about it, and if you do have a discrepancy (ie bad credit) they make you prove that you can pay for med school (I don't really know how one would do that, however). Anyway, most schools DO NOT do credit checks, and so it's a moot point . . . for the most part. Apparently the reasoning behind the whole credit check is to ensure that you have good enough credit to pull out loans, and my understanding is that those schools that do require it have bad financial standing themselves, so they want to make sure all loan debt gets repaid. Anyway, I think this is a rarity. And let's hope it stays that way!

 

[cooldreams]

I think this all got blown out of proportion (and I was one of the people that totally freaked about this). Apparently there are a couple (just a couple!) of schools that do require credit checks as part of your acceptance. I guess they are up front about it, and if you do have a discrepancy (ie bad credit) they make you prove that you can pay for med school (I don't really know how one would do that, however). Anyway, most schools DO NOT do credit checks, and so it's a moot point . . . for the most part. Apparently the reasoning behind the whole credit check is to ensure that you have good enough credit to pull out loans, and my understanding is that those schools that do require it have bad financial standing themselves, so they want to make sure all loan debt gets repaid. Anyway, I think this is a rarity. And let's hope it stays that way!

that is interesting, do you guys actually get your loans through the schools? im getting mine through the federal government, which coincidentally, does not check credit to give out the loan...

 

[Khenon]

that is interesting, do you guys actually get your loans through the schools? im getting mine through the federal government, which coincidentally, does not check credit to give out the loan...

I plan on using as much federally based loans as they'll let me have. If I can avoid private loans I will. That's what made the whole issue so frustrating for me. If one plans to use federal loans, then it's not fair to reject people with bad credit, because it doens't matter in that case. Again, I don't think this is a major issue, but it does seem quite unfair in the cases where one's credit is an issue.

 

[medic170]

that is interesting, do you guys actually get your loans through the schools? im getting mine through the federal government, which coincidentally, does not check credit to give out the loan...

That is right, and in most cases, I would think you could get by on Stafford loans alone if you are frugal. Your credit does not matter for Federal loans unless you have previously defaulted on one.

 

[Rendar5]

Stafford Loan Max is about 40K a year. state school and frugal would work, but not for private It's not enough for my school, but all the other loans trail in comparison.

 

[Paws]

Well, the Staffords are given out by private banks but are authorized by the government. I wonder if the banks have a say in whether they might turn someone down. Probably not if the $$ comes from the governement but it's a good point to investigate.

As for the credit - well, I know that companies might check especially finance companies (banks, insurance, etc) because they want to know that you are not in some weird financial mess and will maybe want to solve that problem by dipping into the company funds. Fair enough. Also, maybe for medschool it could show the history of how a person has managed their life financially.

I am not a tough nazi or anything but I have sure learned to pay my bills before anything else, even if that meant a month of popcorn and tofu. Good credit is really important in alot of ways and I really do my best to keep mine strong.

Here's an excellent way to monitor what's going on with your credit:

http://www.myfico.com/

I recommend the three scores for $44.00 which lets you see what all three companies are showing about you. It's pricey but worth the peace of mind just to know for sure what's going on. 😉 If you wait into the new year it will soon be free to get these scores from the different companies.

 

[medic170]

Well, the Staffords are given out by private banks but are authorized by the government. I wonder if the banks have a say in whether they might turn someone down. Probably not if the $$ comes from the governement but it's a good point to investigate.

Stafford loans do not depend on credit and, when they are admin by private banks, that bank has no say in your eligibility. Everyone qualifies for Stafford loans regardless of credit or who disburses the loan.

Also, freecreditreport.com has the same info from all 3 companies for like $23.00 or you can get the info from one company for free.

Lastly, you are entitled to a free report if you have been turned down or checked in the last 6 months, and as someone eluded to, within the next year you will be able to get it for free, and some states already have it avaliable.

 

[John Deere Gree]

EDIT: I went back to read the thread, and s/he has not be rejected, just warned that she needs to clear things up with the credit card company OR prove that she can pay for schooling.

In other words, it's a pre-allo that's freaking out about nothing, since proof to be able to pay is nothing (all she needs to do is talk to the credit card company to fix the problem OR go to a private loan company/bank say I want this much money for med school costs, have them say they would be willing to consider him/her as a good candidate for education loans, and WALLAH!!! Problem fixed)

I'll leave the original stuff I posted, since it's good info (and a repeat of what's already been said).


I call BS on the acceptance rescindication.

Like every has said federal gov't loans do not take credit scores into consideration unless you defaulted.

The Perkins Loan is usually $5-6K and given out by the schools so depending on the school they can deny that loan based on credit. I know we were told to check our credit report as soon as accepted to clear anything up ASAP before we came begging for money.

If you have a bad credit score, the school more than likely will ask you to prove how you will pay for medical school.

Besides, whoever it is will become a friggin' doctor, and you can go through private comapnies and banks to get the money you need (since phsyician's default rates are low). Banks are happy to give us money as long as they are confident you will pay it back. Besides, they'll go after co-signers (if you have one) or garnish your wages if you decide to run and hide from them. Yes you'll pay more in interest, but the bank will loan it out even if you have an unpaid bill (just be sure to have decent credit everywhere else-which she says she does).