August 12th, 2014 9:04 AM by Salim (Sam) Kader MLO# 130505
FICO announced on Friday (8/8) that under a new system, it will begin ignoring paid collection accounts and place less emphasis on unpaid medical bills when calculating credit scores. Those consumers whose only major black marks are unpaid medical bills could see their credit scores rise by as much as 25 points according to the company. However, if you have unpaid collections, judgments or late payments - sorry, FICO will still penalize you for that. The bigger challenge is Fannie Mae and Freddie Mac are planning not to use the new score in evaluation loan applicants for the foreseeable future (heck they haven't even adopted FICO 8 yet). Though, FICO 9 may sounds good on the surface, majority of homebuyers will not benefit as anticipated.