FICO 9 and medical debt revisited

[vanillabean]

As you may have heard, the proposed plan entitled AHCA (the American Health Care Act) to replace ACA (the Affordable Care Act) has been released. Most are unlikely to be happy once they read the details, such as older people who generally get bigger tax credits toward health insurance, but can be charged by the insurance companies up to five times as much.

And so I am reminded of the announcement of FICO 9 in 2014 with changes such as third party collections that have been paid off no longer have a negative impact and unpaid medical debt has less of a negative impact on a FICO Score 9. They’ll be needed; some 43 million Americans have delinquent medical debt on their credit reports, amounting to about one in five credit reports.

A lot has changed since 1956 when FICO was founded by Bill Fair and Earl Isaac. Since then, the average weight of men and women in the U.S. has gone up by twenty percent, with obesity being most prevalent in rural areas. Credit scores in the rust belt though aren't so easy to figure out; it may surprise some to hear how good they are on average.

Still, it’s one thing for your credit score not to take a hit from medical debt, it’s something else for your household finances to steer of it. Even Critics of Safety Net Increasingly Depend on It.

[RobertEG]

Additionally, be aware that getting medical debt paid by your insurance is the easiest and fastest way to get medical collections deleted.

The new CRA policy, announced under its "National Consumer Assistant Plan" in 2015, includes their own removal of any medical collection if it is shown that it was paid via a medical insuror.  That eliminates any need for GW or PFD requests, or use of other processes, such as the so-called HIPAA process.