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On Behalf of | Aug 20, 2014 | Uncategorized

Michigan consumers may share the concerns of many about the negative effect medical debts have on their credit scores. Medical debt is mostly unanticipated, and many consumers feel that it should not be treated in the same way as other debts. The company who creates the widely used FICO scores, Fair Isaac Corp., announced that there are imminent changes that will become effective soon.

Consumers who are concerned about their unpaid medical debt may be happy to learn that their punishment will not be as harsh as in the past. The Consumer Financial Protection Bureau recognizes that many medical debts are unpaid due to disputes between insurance companies and medical providers, rather than bills that are simply unpaid. Consumers whose low credit score relates only to unpaid medical bills may see significant improvements in their credit scores.

Debts that were in collections and subsequently paid will no longer remain on a consumer’s credit report. Such debts will no longer have a negative effect on one’s FICO score. Lenders have always had a problem with assessing consumers with hardly any credit history. The new FICO version will allow those without credit cards, mortgages or bank accounts the opportunity to apply for such services and be fairly evaluated.

Consumers in Michigan may benefit from the new FICO score system but may still need proper debt management to avoid overwhelming credit card debts, along with medical debt for planned medical procedures. If, however, an individual is already facing insurmountable debts, they may want to consider the protection offered by personal bankruptcy. By obtaining professional advice as to the option best suited to their circumstances, they may be able to walk away from most of their debts after filing for either Chapter 7 or Chapter 13 bankruptcy.

Source:, “A Q&A on changes coming to FICO credit scores“, Marley Jay, Aug. 11, 2014

Source:, “A Q&A on changes coming to FICO credit scores“, Marley Jay, Aug. 11, 2014

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