By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    learn to recognize and treat yeast infections
    Most Commonly Asked Questions About Yeast Infections
    November 17, 2021
    Advanced lung cancer diagnosis systems used by doctors
    Advanced Lung Cancer Diagnosis Systems Used by Doctors
    March 6, 2022
    The Top Benefits of a Wearable Blood Pressure Monitor Watch
    The Top Benefits of a Wearable Blood Pressure Monitor Watch
    June 13, 2022
    Latest News
    7 Most Common Healthcare Accreditation Programs: Which Should You Use?
    August 20, 2025
    Hospital Pest Control and the Fight Against Superbugs
    August 20, 2025
    Hygiene Beyond The Clinic: Attention To Overlooked Non-Clinical Spaces
    August 13, 2025
    5 Steps to a Promising Career as a Healthcare Administrator
    August 3, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    Life Expectancies and Lethal Injections
    May 6, 2015
    The Future of Healthcare and Big Pharma is in Big Data Analytics
    February 5, 2021
    Financial Assistance for Clinical Trials
    September 16, 2015
    Latest News
    How Social Security Disability Shapes Access to Care and Everyday Health
    August 22, 2025
    How a DUI Lawyer Can Help When Your Future Health Feels Uncertain
    August 22, 2025
    How One Fall Can Lead to a Long Road of Medical Complications
    August 22, 2025
    How IT and Marketing Teams Can Collaborate to Protect Patient Trust
    July 17, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: How Does Medical Debt Affect Your FICO Score?
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Business > Finance > How Does Medical Debt Affect Your FICO Score?
BusinessFinance

How Does Medical Debt Affect Your FICO Score?

Abby Norman
Abby Norman
Share
4 Min Read
Medical Debt and FICO store
SHARE

Medical Debt and FICO store

Contents
  • FICO 9 | Medical Debt and Your Credit Score
  • How Does Medical Debt Affect Credit Scores?
  • Is Medical Debt An Accurate Indicator of Creditworthiness?
  • Changing Perspectives on Medical Debt
  • When Will Consumers See Improvements on Their Reports?
  • Millions of Americans Carry Medical Debt

Medical Debt and FICO store

FICO 9 | Medical Debt and Your Credit Score

According to a statement made earlier this week by FICO, the company’s analytics are undergoing major changes that will affect the way medical debt is factored in to a person’s credit score. FICO 9 has arrived.

How Does Medical Debt Affect Credit Scores?

Credit scores are figured by looking at a person’s financial history, including any debts that they have accrued. In the United States, millions of Americans have medical debt, in some cases upwards of thousands of dollars, even though many are either privately or publicly insured. These debts, which were often the result of some unforeseen serious illness or injury, have traditionally had the potential to drastically lower one’s credit score.

More Read

4 Healthcare Degrees with Terrific Job Placement Rates after Graduation
Comparison Shopping
Hooray for High-Priced Hepatitis Treatment Sovaldi
HIPAA Compliance Breaches Higher Than Ever: What Are You Doing About It?
We Have Been Socialized to Be Passive Patients – But That Doesn’t Mean We Aren’t Engaged

Is Medical Debt An Accurate Indicator of Creditworthiness?

Of course, what a credit score really aims to do is assess an individual’s credit risk. This risk is more accurately assessed by the way a person uses their credit cards, takes out loans or miss payments on existing debts. Medical debt is unlikely to be a true indicator of spending habits: not only is it generally accepted to be not a want, but a need, most people find that the cost of healthcare services is often so inflated that they will go out of their way to be as cost efficient as possible (why there is such a market for generic drugs).

Changing Perspectives on Medical Debt

Recognizing this, FICO has stated that medical debt is perhaps not such a major indicator of one’s creditworthiness, and therefore, medical debts will be not be given the same weight as in previous years. While these debts won’t be forgiven (patients should stick to their payment plans) the existence of the debt won’t be regarded the same way as, say, carrying a high balance on a credit card.

What FICO 9 will do is disregard the debts that went to collection and were subsequently paid off or settled. In fact, research shows a large percentage of debts that go to collections are medical bills – and many of them were settled long ago but still linger on accounts.

When Will Consumers See Improvements on Their Reports?

While it’s unlikely that anyone’s credit score will improve by leaps and bounds, for those whose medical debts have been considerably lowering their score the changes could be immediately noticeable. An improved credit score also stands to improve one’s chances of applying and getting a loan or increase their credit limit.

Millions of Americans Carry Medical Debt

1.7 million Americans filed bankruptcy last year because of medical bills – more than any other reason – and that number is rising. One’s credit score only becomes adversely affected by medical debt when the hospital or doctor’s office has turned the bill over to a collection’s agency – at which point it makes its way onto someone’s credit history. Previously, any debt that landed in a collection agency could take up to seven years to disappear from your credit report. That’s nearly a decade of lowered scores because of a single occurrence. If FICO 9 stays true to its word and forgives medical debts from credit reports, that could make a significant difference to those who are currently drowning in unpaid medical debt. It’s early yet to tell if the new credit scoring model will stick, but for many American its a glimmer of hope in an otherwise dark and seemingly endless tunnel of medical bills and healthcare spending.

TAGGED:medical debt
Share This Article
Facebook Copy Link Print
Share
By Abby Norman
My name is Abby Norman and I am a healthcare blogger. With over 10 years of experience in the medical field, I have developed a passion for helping others understand the complexities of healthcare.

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

engineer fitting prosthetic arm
How Social Security Disability Shapes Access to Care and Everyday Health
Health care
August 20, 2025
a woman explaining the document
How a DUI Lawyer Can Help When Your Future Health Feels Uncertain
Public Health
August 20, 2025
physiotherapist at work
How One Fall Can Lead to a Long Road of Medical Complications
Health care
August 20, 2025
Common Healthcare Accreditation Programs
7 Most Common Healthcare Accreditation Programs: Which Should You Use?
Health News
August 20, 2025

You Might also Like

Palliative Care Teams – A Big Improvement in Quality of Life

February 21, 2011

The Fiction Behind The Cost of New Drugs

February 18, 2012

Supreme Court: Can State Governments Dictate How Publicly Available Information Can Be Used?

April 27, 2011
Image
BusinesseHealthHealth ReformHospital AdministrationMedical RecordsMobile HealthPublic HealthTechnologyWellness

HIMSS 2013: Mayhem or Magic?

March 10, 2013
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?