FICO has decided to change their formula for calculating credit score. The change will take effect this fall, 2014.
The credit risk scoring company will lower the weight of unpaid medical debts in relation to other forms of financial obligations like credit card debts, auto loans and home mortgages.
That means your credit score might improve if you happen to pay all your bills on time, but got in trouble with your hospital bills.
You credit score represents your overall financial health and credit history. Major lending companies use this to assess if you are worthy to get a credit card, auto loan or home mortgage.
Moreover, a credit score dictates the interest rate you can get from these institutions. The higher your score the easier it is to get the loan you need.
Consumers can view the information credit bureaus keep about them by using AnnualCreditReport.com.
They will not provide your credit score directly, but they will give you all the information used as the basis for computing your score. You can use this information to correct any mistakes that are damaging to your financial credibility.
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