New FICO score model helps with Medical… Or does it?

FICO newest scoring model FICO 9.0 has changed its credit-scoring model by putting less focus on medical debts and will give consumers a break on their score IF they’ve settled with a collections agency.

It sounds like FINALLY, the newest credit scoring model helps the little guy, the American consumer. HOWEVER… it’s unlikely to change credit scores for most people anytime soon.

The new model touts paid medical bills are scored as neutral. Note the word PAID, which means if you are settling an account if the letter you get (IN ADVANCE) does not say the account will be marked PAID IN FULL then it will count against you.

For consumers reading this I write a lot of these blogs to help educate you when either thinking about fixing your credit on your own or assessing if you believe I am a reliable and solid company to work with to help achieve your financial goal.

It has recently come to my attention that some other credit repair companies have been reading these to help educate themselves on credit so after hearing this and deciding it is not my job to educate other companies who go around stating they are credit specialists I am going to explain several things on each topic and blog but not go into the major detail on certain aspects of the topics.


The limits of these collections are $100 as mentioned by FICO. While many times there are medical bills on consumer credit numbering in the thousands many, many times there are what seems to be a ton of “little” bills ranging from $3 to 75. So paying these pesky little annoying bills seems like the perfect way to help your credit.

People cannot help getting sick and the medical business (yes I said business not industry) is littered with incompetency. Don’t believe me? If you have a few medical bills try going to the place where you had the services ( if the debt is a little old) and then ask for the manager and see what they can do to take the debt back from the collector so you can pay them directly (warning if you have long hair be prepared to pull it out).

So at face value this looks like a plus for consumers but here is the analogy that will make the reality of this stick. What good is the model if the banks/lenders/analysts do not use the model?

The financial industry is loath to change and while the previous scoring model came out a few years ago a majority of the lenders have not utilized it and only a few have recently started to.

PLUS… if the lender does not feel the new model represents the true picture of a consumer’s financial wellbeing and stability, why would they use it?

And if you are trying to buy a home then do not expect when the news articles hits that FICO 9 is now available and consumers are expecting to see an approximate 25 point increase in score, be prepared to be disappointed.


Want to learn more about how credit actually works and how lenders view you? Buy my book “The Real World of Credit” on my website www.waynethecreditguy or go to and get the electronic version on Barnes and Nobles website!