FICO to Change how it Treats Medical Debt

[freeme0215]

Hello All,


FICO is moving to a new version this fall, that will allow you to pay off a medical bill that is on your credit report and when it is paid off, it comes off your credit report.

They are also placing less weight on a medical bill that is on your credit report...what I have read is that if all you have on your credit report is medical bills, the average score will increase by 25 points.

Lenders will not use the new FICO score exclusively for awhile..

All I have are two medical bills on an otherwise clean credit score...of course I have my BK till 2017, but my score has been raising and this information will only help me.



Thanks

[kornellred]

I have no idea what is being communicated here. I must be losing my mind.....

[LadyInTheRed]

I have no idea what is being communicated here. I must be losing my mind.....

I moved the thread and revised its title to be consistent with the topic.

[TXskyblue]

An issue is that FICO has multiple models and thus multiple different scores. Lenders choose which one they wish to use. Some lenders still use relatively old FICO models. I believe the most common model used is FICO 8, but some lenders use FICO 04, FICO 98, FICO NextGen, and even sometimes (but rarely) FICO 95.

The news that FICO has a new model that places less reliance on medical debt is of limited practical value. Few lenders will use it, at least in the short term. In the long term, it may never be adopted by the industry and essentially ignored. No one knows. Even if it achieves significant adoption, you (as someone applying for credit) would need to find out which model a lender uses before applying if medical collections are a major issue for you. Some lenders will tell you. Some won't.

The new model is FICO 9, BTW.

[df04527]

^Agree...lending institutions are VERY slow at adopting any new model, if at all. Everyone has their own flavor.