With the introduction of FICO Score 9, medical collections will have less prominence in affecting the FICO score as credit worthiness for potential homebuyers, expected to increase by 25 points consumers’ median FICO scores, according to what housingwire.com tells MHProNews. Applauded by the National Association of Realtors (NAR) because it will broaden access to credit for qualified homebuyers, Barrett Burns, president and CEO of competitor VantageScore Solutions says, “Changes to the new FICO model apparently try to remedy many lender and consumer challenges already addressed by VantageScore.” He says the VantageScore 3.0 model, released in March, will give a better level of risk predictiveness allowing lenders to extend credit to tens of millions of consumers who were not previously eligible.

Anthony Sprauve of FICO replies, “What FICO announced today is a new refined treatment of unpaid collections – medical and non-medical – that differentiates unpaid medical from unpaid non-medical collection agency accounts. This ensures that unpaid medical collections have a lower impact on the FICO Score, commensurate with the credit risk they represent. These enhancements result in greater precision.” ##

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