WHAT ARE THE CHANGES?
— Debts that go to collections agencies and get repaid won't count against a consumer's FICO score.
— Medical debts will have a smaller effect on the score. If your only major bad mark comes from unpaid medical debts, FICO says it expects your credit score to go up by 25 points. (Scores range from 300 to 850.)
— A technique to analyze people's creditworthiness if they don't have much of a credit history.
WHY ARE THE CHANGES HAPPENING?
Regulators have focused on health care debts. In May the
WHO WILL BE MOST AFFECTED?
According to a study by the
As for the new technique focused on those with little or no credit history, McDaniels says its effect remains to be seen. He says lenders want to get a better read on such consumers because they see them as potential customers and want to know which are likeliest to repay loans. The technique will help lenders evaluate people who don't have a bank account, mortgage or credit card — often those with lower incomes, including young people and retirees.
WHEN DO THESE CHANGES GO INTO EFFECT?
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