Proposed changes to how credit scores are calculated could mean that a new group of New Orleans area home buyers will soon be eligible for a mortgage loan.
According to Bloomberg News, the Fair Isaac Company (FICO) is making the following changes when calculating consumer credit scores:
- Reducing the impact of medical bills on credit scores
- Remove accounts from credit bureaus that were once late but now paid off
The adjustments are expected to raise the median score for consumers whose only major delinquency is an unpaid medical bill by 25 points, according to an Aug. 7 statement from San Jose-based FICO (FICO), formerly known as the Fair Issac Corp. The updated scoring system is intended to better capture more recent behavior and will be available later this year, the company said.
Some other good news about these changes
Since credit scores are often used in hiring and setting insurance rates, the changes to credit score calculations could also mean more job opportunities and lower insurance costs.