THD Credit Consulting

How the new FICO model can effect you

Erik Kaplan

Erik Kaplan

Erik is the CEO and Founder of THD Credit Consulting

Got Medical Debt? Your scores could rise with the new FICO model.

Did you know the Fair Isaac Corp., developer of the FICO credit score, announced the debut of a new score version that will no longer penalize consumers who have medical debt-collection issues in their credit files?
This means if you have any paid or settled medical debt in collections it will not effect your credit score.  FiCO Score 9 will also weigh unpaid medical debt in collections less, to ensure a lower impact on your score.

How can this effect you?

  • If you are a consumer with a great credit record except for paid or settled medical bills in collections – you would see a dramatic score increase under this new model.
  • Medical bills account for more than half of all non-credit related collection actions reported to consumer credit reporting agencies and Fair Isaac estimates that the new model will increase scores by a median 25 points

The changes are expected to increase the number of people approved for loans, especially those shut out of the credit market due to medical debt sent to collection agencies.

According to credit reporting agency Experian, more than 64 million consumers in the U.S. have medical debt collections on their reports.

Unfortunately, consumers often do not know they have a medical debt that has gone into collections until after it has been reported to a credit bureau.

Among those who did know they had medical debts, some said the amount of the bill was in dispute or that they were not liable for paying it because it was supposed to be covered by insurance.

What you should know about medical debt…

1. All it takes is a $50.00 co pay or a small balance to slip thru the cracks and lower your score 30-70 points. Always check your bills from DOCTORS and HOSPITALS.

2. If you are married and your spouse has medical debt in collection, most states will add this to the YOUR credit… so be aware.

3. If a collection account is over 6-9 months old most insurance agencies will not pay the medical collection.

4. Even if you are making payments, you may find your account turned over to collections with no advance warning. Talk to your doctors office about how to ensure this doesn’t happen.

5. Even if you never received a billing statement, a medical bill that is unpaid could be sent to a collection agency. There is no federal law that protects you from this type of situation


– Within 35 days, I will attempt to get these collection accounts deleted.  Once they are deleted, they will not show up on your credit report.

– If debts are over 4 years old, I have a significant opportunity to get them deleted.  

– If accounts are not deleted, I will try to settle and have them deleted at the same time.  Once an account is paid it typically takes 7-15 days to be removed from your credit report.

– If you have medical debt and are looking to purchase a car, home, boat or plan on getting a student loan – by removing this debt I will raise your scores between 20-60 points. 

Have questions about medical debt or the new FICO model, give me a call at (800) 822-7120 or email me at, and let’s talk. 


Erik Kaplan

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