FICO 9 – What’s Different?
The big change is how FICO 9 treats unpaid medical bills. The FICO 9 formula treats medical bills sent to collections differently than other debts. These debts won’t ding your credit as much as non-medical debts sent to collection. The change follows studies by the Consumer Finance Protection Bureau (here’s one). This change is sensible. Medical debt is often for things outside of our control. Consumers may overspend on vacations and electronics, but they are less likely to be addicted to emergency room visits. As explained by Fair Isaac earlier this year:
FICO® Score 9 differentiates unpaid medical accounts in collections from unpaid non-medical accounts in collections. FICO’s research found that unpaid medical accounts were less indicative of credit risk than unpaid non-medical accounts. In fact, building the most predictive credit score requires treating medical collections this way.
A second significant change with FICO 9 is the score’s treatment of paid collections. When a debt is sent to collections, it understandably hurts a consumer’s credit score. The new credit score formula, however, disregards any collection matters that the consumer has paid in full.
Rent Payments May Count
A final big change deals with rent payments. Under FICO 9, rental payment history is factored into the score when a landlord reports the payments to a credit bureau. This change can be particularly helpful to those with a limited credit history.
Read the full article on Forbes.com
How to Get Your FICO 9 Credit Score
You can find a list of the different ways to get access to your credit scores here.