Major credit-score provider to exclude medical debts

 Credit-score provider VantageScore Solutions LLC said it would stop factoring all medical debts that are in collections into the latest versions of its scores.

VantageScore’s decision goes beyond a recent move by Equifax Inc., Experian PLC and TransUnion to remove many medical collections from people’s credit reports. The three companies own VantageScore, which competes against Fair Isaac Corp., the creator of the more widely used FICO credit scores.

Hospitals and other medical providers send unpaid bills to collection companies, which then report the accounts to the credit-reporting firms. The information often lowers people’s credit scores, which makes it harder to get approved for credit or to get loans on affordable terms.

VantageScore expects the change to take place in October. Millions of people with medical debts in collections could see a score increase of as much as 20 points, the company said.

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