If You Have Medical Debts, Your Credit Score Will Get Better Soon.
For many, debt or bad credit is largely due to high medical bills or the mismatch between what insurance will be covered and what the doctor wants to get. The FICO is poised to do something this year with a new formula for calculating your score – one that does not provide for the collection of medical debt penalties it once did.
US News Money spoke to Anthony Sprouw, Senior Consumer Lending Officer at Fair Isaac Corporation (FICO), who explained:
FICO recently introduced FICO 9, which will be released to lenders earlier this year. One of the notable innovations in FICO 9 is the way it handles collection medical debts. “It won’t punish it as seriously as it used to,” says Sprouw. “Many people find themselves in debt for medical services that have gone into collection, not even suspecting that they owe this debt because of a misunderstanding between the provider and the insurance companies.”
Of course, although lenders will get FICO 9, they will still have to enable and use it – most lenders currently use FICO 8, but Sprauve explains that some lenders are using older versions, just as some businesses use older operating systems for example.
While it’s best not to let these medical bills go into fees at all, some of the costs of hospital, treatment, and specialists can be so large (and so unexpected) that it is almost impossible for them not to. On the other hand, it’s good to take a break from the financial system from time to time, but on the other hand, the good news only underscores the importance of an emergency fund that you can use in case of a medical emergency. … Follow the link below to read more about the news and some of the differences between the bureau scores.
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