The Fair Isaac Corporation, widely known as FICO, has reissued its popular credit score-calculating formula which will lower the impact medical collections have when calculating an individual’s overall score.
FICO Score 9 will not only lessen the impact of medical collection accounts, but it will also ignore old debts with a zero-dollar balance. FICO’s theory is that this will encourage debtors to work with collection agencies to settle or pay off their debts.
FICO has said that these changes could allow consumers, whose credit history are blemished only with unpaid medical debt or paid collections, to qualify for credit previously unavailable to them.
It could be years before the new system is adopted by lenders, though it will be available fall of 2014.
For more information regarding this update and how it may affect you or your business, contact Joseph Messer at (312) 334-3440 or at firstname.lastname@example.org.