@pizzadude wrote:
Very interesting ~ especially this " the median FICO Score for consumers whose only major derogatory references are unpaid medical debts is expected to increase by 25 points"
Unfortunately it may be a while before lenders adopt FICO 9, so we'll have to wait and see....
I actually think we'll see the major credit card lenders being evaluating it near immediately.
My own experience: no lender has ever cared about a paid collection on my reports, some have cared when my collection was open. We also seem to anecdotally know that medical collections don't carry the same weight as other collection types for lenders.
Fact is, these changes are what the banks have been doing for the past several years, and if they can integrate that more comprehensively into their underwriting standards, I suspect they'll be all over it. Like anything they'll need to run it against their own data and likely concurrently for a while, but wouldn't surprise me at all to find the major lenders all moving to it... and it's more compelling for the smaller lenders too I suspect than the FICO '04 to FICO 8 transition was.
Still going to be stuck on the mortgage side, unfortunately for the same tired old reasons.
Wade, THANKS for posting this article!
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@Transmogrifying_Bee wrote:Wade, THANKS for posting this article!
Your welcome
it will sure help a lot of people when it rolls out and lenders start useing it
@Trapper123 wrote:Do you think settled for less than full amount taglines would be considered "paid collections" so that they would disappear?
Settled accounts are bypassed in FICO 09 as well.
However, paid collections are still shown on your credit reports. They just won't affect FICO 09 scores.
@Revelate wrote:
@pizzadude wrote:
Very interesting ~ especially this " the median FICO Score for consumers whose only major derogatory references are unpaid medical debts is expected to increase by 25 points"
Unfortunately it may be a while before lenders adopt FICO 9, so we'll have to wait and see....
I actually think we'll see the major credit card lenders being evaluating it near immediately.
My own experience: no lender has ever cared about a paid collection on my reports, some have cared when my collection was open. We also seem to anecdotally know that medical collections don't carry the same weight as other collection types for lenders.
Fact is, these changes are what the banks have been doing for the past several years, and if they can integrate that more comprehensively into their underwriting standards, I suspect they'll be all over it. Like anything they'll need to run it against their own data and likely concurrently for a while, but wouldn't surprise me at all to find the major lenders all moving to it... and it's more compelling for the smaller lenders too I suspect than the FICO '04 to FICO 8 transition was.
Still going to be stuck on the mortgage side, unfortunately for the same tired old reasons.
I think this is right, especially after the CFPB's report on medical collections unfairly impacting current scores. This also opens up many more potential customers to lenders without increased risk. There might even be enough pressure to upgrade for the GSEs that still mandate FICO 04 on most mortgage underwriting. That will probably take longer given how entrenched FICO 04 is and they would have to validate new models to long term mortgage loans. That's no easy or short task.
Thanks for posting this article. I've been working hard to get my credit score up so I can get approved for a home loan. However, after having surgery in late April, the hospital sent me to collections without so much as a phone call even though I had been paying $50 - $75 every month...and they're still sending me bills. I'm hoping this FICO 9 is adopted by lenders. My heart sank because I've brought my score up from 509 (March) to 644 and I feel like it's just going to go right back down. 