The nation's top credit score provider, FICO, will introduce a new scoring procedure in the fall. Medical debt that is in collections will have less impact on your credit score. The scoring procedure was created by the three major credit bureaus and was originally announced last year. It is expected that the FICO score for those with only unpaid medical debt on their credit report will raise by 25 points. To lenders this means that those struggling to pay medical bills will look better in terms of risk and may qualify for better loan rates.
FICO will also disregard debt in collections that is completely paid off or settled. As of now, even collection debt that is paid off may last up to seven years as a negative impact on credit.
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