Law Office of Paul Petrillo
Contact Us Today 603-635-4149
Menu Contact

New method of scoring by FICO

The credit history and FICO score data may be soon collected differently with an advantage to the consumers, including New Hampshire residents. In order to help the consumers improve their scores, certain medical debts will be weighed differently, leading to boost in ratings by as much as 25 points. This method might also help the lending institutions to better assess creditworthiness when deciding to approve a loan, according to a former FICO employee.

Medical expenses often weigh heavily on the scoring system conducted by FICO. However, the new system discounts outstanding medical balances because these accounts are often quickly handled and caused by misunderstandings with insurance providers. By the time consumers are contacted by the collection agencies, their credit may already be negatively affected.

A spokesperson with the U.S. Consumer Financial Protection Bureau suggested that the entity welcomed the new more-precise method, suggesting that credit scores play an integral role in the lives of many consumers. However, there are some barriers to the positive benefits of the system. For example, the former FICO employee suggested that the lenders will actually need to use the scoring system. Additionally, the effect of the system on lenders is not clear, and certain companies declined to make comments in an article discussing the new method.

Even as FICO takes steps to develop a better system for determining how creditworthy a person is, certain consumers might find it difficult to keep up with debts and maintain payment schedules. Those who are placed under the pressure of mounting balances and creditor harassment might benefit from working with a lawyer. Depending on the circumstance, the lawyer might suggest that the client file for federal bankruptcy protections.

Source: Reuters, "FICO's new scoring model to help lenders better assess risk", Amrutha Gayathri and Emily Stephenson, August 08, 2014

No Comments

Leave a comment
Comment Information

Start Your Case Today

Whether you have a family law issue, an estate planning question or are considering bankruptcy, I can help you find a sustainable solution that provides relief and hope. Schedule your consultation at my Nashua, New Hampshire office today by calling 603-635-4149 or by sending us an email.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

email us for a response
Law Office of Paul Petrillo