Latest News in the Business and Financial World

Thursday, April 15, 2021
Log in
  • Home
  • Company News & Financials
  • OTC Markets
  • Tech & Science
  • Health & LifeStyle
  • About WS OTC
    • Analysts & Contributors
    • Contact Us
    • Advertising
    • Feedback
    • Privacy Policy GDPR
  • Mobile
  • Latest News
    • New Theories Explain the Disappearance of the Mayan Civilization
    • What Happens If Coral Reefs Die?
    • Monsanto Loses Lawsuit for its Herbicide Products
    • Mankind (MNKD) shares Plunge after FDA Approves Afrezza, inhaled Insulin for Diabetes patients
    • Psychologists Confirm that Violent Video Games Boost Aggressiveness
    • World of Warcraft: Warlords of Draenor Release Date on Nov 13
    • iPass Global Hotspot Map Unveils Worldwide Wi-fi Coverage

Pages

  • About Wall Street OTC
  • Advertising
  • Analysts & Contributors
  • Contact
  • Feedback
  • Mobile
  • Privacy Policy GDPR
  • Terms of Service

Recent Posts

  • SF Hospital Slaps New Parents with $19K Bill for Baby Treatment
  • Furious Trump Blasts Harley-Davidson for Moving Production Overseas
  • Warning! MRI Machines Could Poison You
  • Flight Attendants More Likely to Get Certain Cancers
  • More Red Meat Allergy Cases Related to Lone Star Tick Bites

FICO launches new credit scoring model to benefit millions of consumers

Aug 9, 2014 By David Warren Leave a Comment

Email, RSS Follow

Personal credit score provider FICO has announced that it is going to launch a new model for credit scoring which will offer the consumers to assess the collection information in a better way.

FICO, a creator of one of the most widely used credit scores, said that the new credit score model will encourage the credit ratings of borrowers and help the lenders to better assess risk.

The company also said that under its latest credit score version medical debts would no longer be weighed as stringently as it was carried in previous iterations.

According to a FICO statement, the credit score changes will weigh medical debt less heavily than unpaid credit card debt and other collection information.

A Wall Street Journal report also said that under its latest version the credit score provider will not be considering previous overdue bills that have been already paid by the borrowers.

credit-score

“Lenders can avail the new scores through the US credit reporting agencies starting this fall,” FICO said.

The development comes after the 2014 report issued by the US Consumer Financial Protection Bureau (CFPB) said that credit scores excessively penalize consumers with medical debt in comparison to other forms of debt.

“Given the critical role that credit scores play in consumers’ lives, we welcome steps by industry to adjust how it weighs medical debt in order to be as precise as possible in predicting the creditworthiness of a consumer,” a CFPB spokesman said on Friday.

John Ulzheimer, a credit expert and a former FICO employee, said that FICO’s new scoring model will help in identifying risky borrowers and also facilitate the sub-prime lenders to lessen their risk of engaging in business with such borrowers in a better way.

“I’m not exactly sure what impact this is going to have on sub-prime lenders, because for the score to be meaningful to the customers, the lenders have to actually start using that score,” Ulzheimer added.

FICO, which claims that its brand of scores is used by 90 percent American lenders, said that its new model also discount overdue medical payments and improve the median score by 25 points for individuals with unpaid medical debts.

Under the new scoring system, if a consumer has a median score of 711 and clean credit history but has unpaid medical debts then he/she is likely to see their FICO score rise by 25 points.  This will lead to consumers mostly qualifying for more handsome interest rates on various loans. This in turn will result in raising the savings by u thousands of dollars.

“It probably doesn’t mean the difference between an approval and a denial, but it can mean the difference in a more advantageous rate,” said Ulzheimer.

According to the Federal Reserve, medical debt represents about half of the total debts going to collections in the US.

A latest Urban Institute study said more than a third of Americans have had a collections agency after them. Their number is about 64 million, says Wall Street Journal report, citing Experian, another credit-rating group.

Email, RSS Follow
The following two tabs change content below.
  • Bio
  • Latest Posts

David Warren

David Warren is a serious tech aficionado. Five years ago he finished his studies at the California Institute of Technology, Caltech, where he earned a degree in Computer Science. Two years ago he got hired as a data protection analyst in an American multinational. When he’s bored with security protocols he enjoys writing reviews and previews of his favorite gadgets and games.

Latest posts by David Warren (see all)

  • Scientists Take A Closer Look At One Of The World’s Largest Volcanic Eruptions - Oct 15, 2017
  • Insects Such As Fruit Flies Can Unexpectedly See In High-Res - Sep 10, 2017
  • The Swimming Style Of Plesiosaurs Explained By A Robot - Sep 1, 2017

Filed Under: Business, Company News & Financials Tagged With: credit scoring, FICO, medical debts, Personal credit score provider

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 72 other subscribers

Mom holding newborn's hands

SF Hospital Slaps New Parents with $19K Bill for Baby Treatment

Jun 29, 2018 By Anne-Marie Jackson Leave a Comment

Harley-Davidson biker

Furious Trump Blasts Harley-Davidson for Moving Production Overseas

Jun 28, 2018 By Anne-Marie Jackson Leave a Comment

MRI machine

Warning! MRI Machines Could Poison You

Jun 27, 2018 By Anne-Marie Jackson Leave a Comment

Flight Attendants More Likely to Get Certain Cancers

Jun 27, 2018 By Anne-Marie Jackson Leave a Comment

Lone star tick sitting on a succulent leaf

More Red Meat Allergy Cases Related to Lone Star Tick Bites

Jun 26, 2018 By Anne-Marie Jackson Leave a Comment

Time magazine cover

Time Admits Sobbing Cover Girl Was Not Separated from Parents

Jun 26, 2018 By Anne-Marie Jackson Leave a Comment

Sunshine and green leaves

Vitamin D Deficiency Could Boost Risk of Lung Disease

Jun 25, 2018 By Anne-Marie Jackson Leave a Comment

Green-light laser pointer

Greek Boy’s Retina Severely Damaged by Laser Pointer

Jun 22, 2018 By Anne-Marie Jackson Leave a Comment

Red Tesla car

Tesla Suing ‘Whistleblower’ over Data Theft

Jun 21, 2018 By Anne-Marie Jackson Leave a Comment

Boiled eggs and mayonnaise

Eating too Clean Can Lead to Orthorexia

Jun 20, 2018 By Anne-Marie Jackson Leave a Comment

NYC mayor Bill de Blasio

NYC Will Allow People to Smoke Pot in Public

Jun 20, 2018 By Anne-Marie Jackson Leave a Comment

A kitten and a puppy sleeping in a bed while hugging each other

Who Is Smarter Between Cats and Dogs? Researchers Have an Answer (Study)

Jun 19, 2018 By Anne-Marie Jackson Leave a Comment

Orthodox church in Greece

Being Religious Is Tied to Longer Lifespan, Study

Jun 19, 2018 By Anne-Marie Jackson Leave a Comment

Bacon and eggs for breakfast

How Does the Keto Diet Work?

Jun 18, 2018 By Anne-Marie Jackson Leave a Comment

Related Articles

  • Harley-Davidson biker

    Furious Trump Blasts Harley-Davidson for Moving Production Overseas

    Jun 28, 2018
  • Red Tesla car

    Tesla Suing ‘Whistleblower’ over Data Theft

    Jun 21, 2018
  • Mediterranean Diet

    Major 2013 Study on Mediterranean Diet Withdrawn

    Jun 15, 2018
  • Chinese man in a taxicab

    China Uber Rival to Allow Only Same-Sex Passengers as Driver at Night

    Jun 14, 2018
  • Bitcoin rendition

    Market Manipulation Was Behind Bitcoin’s 2017 Price Surge, Study

    Jun 13, 2018
  • American kids selling lemonade

    American Kids Forced to Obtain Permits to Sell Lemonade

    Jun 12, 2018
  • President Donald Trump and VP Mike Pence

    America Could Be Hit By a 2008-Like Recession in 2020

    Jun 6, 2018
  • Hobby Lobby store at night

    Hobby Lobby Agrees to Return Smuggled Artefacts to Iraq

    May 3, 2018
  • United Airlines airplane

    United Airlines to Resume Pet Reservations in July

    May 2, 2018
  • Nikola Motors truck

    Tesla Motors Faces $2Bn Lawsuit for Allegedly Copying Electric Truck Design

    May 2, 2018

Categories

  • Business
  • Company News & Financials
  • Diversified Financial
  • Entertainment
  • Featured
  • Health & LifeStyle
  • Micro Cap
  • Mid Cap
  • National News
  • Nature
  • OTC Exchange
  • OTC Markets
  • OTC Research
  • Science
  • Small Cap
  • Sports
  • Tech & Science
  • U.S.
  • Uncategorized
  • Wall Street
  • World
  • World Indexes

Copyright © 2021 wallstreetotc.com

About · Privacy Policy · Sitemap · Terms of Service · Contact