FICO Changing How it Figures Credit Scores

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FICO Changing How it Figures Credit Scores
WASHINGTON, D.C. (Realtor.org) – Many Americans may soon find it easier to qualify for home loans thanks to changes FICO is making in how it calculates credit scores.

The changes, which take effect this fall, include reducing the toll that overdue medical bills can take on credit scores and removing penalties from consumers who have paid off debts that had been assigned to collection agencies.

A recent study by the Consumer Financial Protection Bureau found that both paid and unpaid medical debts were unfairly penalizing consumers’ credit ratings. An estimated 64 million Americans have a medical collection item on their credit reports, according to Nick Clements of Magnify Money, a personal finance site.

Although the FICO changes take effect this fall, lenders say borrowers may have to wait at least a year before they see any changes in their scores.

In other credit-related news, Experian and TransUnion recently reported they’ve added verified rental payment data into credit files, which will be used to compute a consumers’ score when applying for a mortgage.
Categories: Mortgage & Finance
Local: Sugar Land West
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Disclaimer: The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of the HRIS.
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