FICO Score 9 may help those dealing with medical bills
Some consumers can benefit from these Score 9 changes by as much as 25 points.
By Ed Westerman, Broker Country Lifestyle Realty, L.L.C. Call or Text 417-844-2626
Many times over the past years I have personally been involved with prospective home buyers and renters who were dealing with credit issues brought on by unexpected medical bills. Many hard-working, prudent Americans around the country are struggling to deal with this financial setback. Sudden and unexpected medical costs can devastate otherwise responsible people.
When unpaid medical bills go to collections it can cause a credit score drop and show negative results on credit reports. Drastic drops in one’s credit score will make it difficult, if not impossible, to get a loan. Sadly, once one’s credit scores drop drastically, individuals or families often must pay staggeringly high interest to get loans, if they get one at all. And improving one’s credit becomes a major challenge to those consumers. One’s FICO scores are 3 digit numbers and can range from 300 to 850. It summarizes your credit risk based on information in your credit report at a particular point in time.
Quoted from www.federalreserve.gov:
“The Federal Reserve reports that more than 50% of collection records and 20% of lawsuits that appear on credit reports are due to medical debts. Aside from monitoring your credit, you should contact your health insurance company to inquire about any medical invoices that they didn’t pay.
Lending institutions have no doubt influenced the FICO course of action in making these changes to their scoring system. FICO has responded to the market place with the new FICO Score 9 algorithms which made some changes in scoring that may help borrowers.
The new FICO Score 9 grew from research and development by FICO starting back in 2014, and has been available to consumers since 2016. It may well be the biggest change to their algorithm formula in 25 years. Some consumers can benefit from these changes by as much as 25 points.
Watch for more Score 9 details in coming blogs.