As you probably know, it’s very tough to get a car loan with collections. If your main issue has been medically-related, you may be in for some good news. Fair Isaac Corporation, better known as FICO, is releasing a new update to their scoring model in late 2014. Dubbed “FICO 9,” the new model could be a boon for consumers whose only credit problems have to do with medical debt. In the past, the model did not discern between different types of debt that had gone to collections. The new model, however, will look at medical debt separately, leading to a possible 25-point boost for consumers with medical debt collections as their primary negative. According to one senior specialist:
“So, certainly, it could push them from one tier of a loan to another.”
Believe it or not, this will be FICO’s first major update to their scoring model in six years (2008). Currently the various credit bureaus are evaluating the model. We do not yet have a firm release date, but we will keep you updated as we learn more.