Medical collection accounts in the very near future won't harm a credit score and it's simply a matter of Fannie Mae and Freddie Mac adapting to the new scoring system.
That August, credit score giant FICO announced the newest version of its score — the creatively named FICO 9 — would weigh unpaid
medical collection accounts less severely than other outstanding collections.
State law KRS 413.120 sets the statute of limitations
for medical collection accounts to appear on your credit report at five years; the same as for credit cards.
In terms of my score, I've seen a 82 point increase on average ever since signing up with them - after they successfully removed my Verizon wireless collections and a couple
other medical collection accounts.
Unpaid medical bills generally turn
into medical collection accounts, and sometimes can even lead to judgments if your creditor decides to sue you for your outstanding debt and you lose the case.
If you already have problems with derogatory information appearing on your credit reports, then adding one
more medical collection account to the mix may not have much additional negative impact on your credit scores.
That August, credit score giant FICO announced the newest version of its score — the creatively named FICO 9 — would weigh unpaid
medical collection accounts less severely than other outstanding collections.
The paid
medical collections account, and the new delinquency.
Your medical collections account could come off your credit report after seven years.
Medical collection accounts that remain unpaid stay on your credit report until seven years after the date of first delinquency.
The medical collections account deletes according to the same schedule.
Paying off
a medical collections account will improve your credit score.
It's a very, very confusing process and
medical collection accounts are not that rare.
If all else is equal, paying off a non-medical collection account before
a medical collection account should result in a greater boost to your score.
Another detail that might be important to you is that
medical collection accounts are treated differently than non-medical collection accounts in the newest scoring models.
In one test set, machine learning discovered that consumers who have less than $ 1,000 in
a medical collection account that's more than 36 months old and they've applied for credit more than three times recently, have a 32 % default rate.
Therefore, if you plan to use your credit to apply for a loan or credit card in the future,
your medical collection accounts could potentially cause you problems.
However,
a medical collection account may not have as a big an impact on your credit score as some other accounts, depending on the scoring model used.