Unpaid Medical Bills Will No Longer Be a Big Drag on Your Credit Score

Struggling to keep up with your medical bills? A change in the way the most important of your credit scores is calculated could make missed payments for doctor visits and hospital stays less damaging to your three-digit FICO credit score.

FICO announced last August that it would place less emphasis on missed medical bills when determining the credit scores of borrowers. According to FICO, those borrowers whose only financial missteps are unpaid medical bills could see their FICO credit scores jump by as much as 25 points.

This is good news for consumers who always make their auto-loan credit-card and mortgage loan payments on time but have been struggling with higher healthcare costs. FICO’s decision to make unpaid medical bills less of a drag on consumers’ credit scores could also mean that a greater number of these consumers will now be able to qualify for mortgage loans. Of course, this doesn’t mean that you shouldn’t pay your hospital and doctor bills on time. After all, if you do, your credit score will be even higher than it already is. Remember, the surest way to a strong credit score is to pay all of your bills on time. And if you want to provide another boost to your score, pay down as much credit card debt as possible.

These two steps will provide you with the surest path to qualifying for a mortgage loan.