Removal of Medical Debt from Credit Reports

A landmark CFPB rule, effective March 17, 2025, will exclude unpaid medical bills from consumer credit reports. This initiative seeks to prevent medical debt—a common consequence of unforeseen health issues—from hindering access to mortgages, car loans, or small business financing. The CFPB estimates that this change will eliminate $49 billion in medical debt from credit reports, benefiting over 15 million individuals and potentially increasing credit scores by an average of 20 points. This adjustment could result in approximately 22,000 additional mortgage approvals annually.

Transition to New Credit Scoring Models

Concurrently, the FHFA has mandated that Fannie Mae and Freddie Mac adopt two updated credit scoring models: FICO 10T and VantageScore 4.0. These models incorporate alternative data sources, such as rent, utilities, and telecom payment histories, offering a more comprehensive view of a consumer’s credit behavior. Notably, VantageScore 4.0 requires only one month of credit history to generate a score, potentially enabling millions of previously unscored consumers to establish credit profiles.

Shift from Tri-Merge to Bi-Merge Credit Reports

Another significant change is the transition from tri-merge to bi-merge credit reports for mortgage applications. Historically, lenders reviewed credit reports from all three major bureaus—Equifax, Experian, and TransUnion. Starting in the first quarter of 2025, lenders will be required to obtain reports from only two of these agencies. This shift aims to reduce costs and streamline the mortgage application process without compromising the accuracy of credit assessments.

Implications for Consumers and Lenders

Collectively, these reforms are designed to promote financial inclusion and provide a more accurate representation of consumers’ creditworthiness. By removing medical debt from credit evaluations and incorporating alternative payment histories, the changes aim to grant more individuals access to credit opportunities. However, consumers should remain vigilant in managing their debts, as unpaid obligations can still lead to collection efforts, even if they no longer impact credit scores.

Lenders will need to adapt to the new scoring models and reporting requirements, which may involve updating underwriting processes and retraining staff. While these adjustments may present initial challenges, the long-term benefits of a more inclusive and precise credit assessment system are expected to outweigh the transitional complexities.

The credit score changes taking effect in March 2025 represent a significant shift toward a more equitable and accurate financial system in the United States. Both consumers and lenders should prepare for these changes to fully leverage the opportunities they present. For consumers aiming to make the most of these new scoring methods, proactively managing and improving their credit scores remains essential. Companies specializing in credit improvement, such as Super Credit Repair, can offer valuable guidance to help individuals navigate these adjustments effectively and achieve their financial goals.

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Lots of folks are under the impression that your credit score only matters if you are making a large purchase, such as a car or a home. A credit score, which can also be referred to as a FICO score, is used in many everyday life situations. If you’re leasing a home, your landlord will probably check to see if you have good credit. It is not uncommon for those with bad credit to have been evicted from a past residence. Those people will have a tougher time finding a landlord who will approve them.

You may also find that if you have good credit, you have an easier time getting your utilities hooked up. Those with bad credit may find they need to pay a higher deposit. One never knows when they will need to relocate, as natural disasters and fires could happen at any given time.

Should you possess a great FICO score, you’ll find that you have lower interest rates on loans and charge cards. This will allow you to have lower payments, which means you will most likely be able to pay off the loan or charge card faster.

To go along with advances and charge cards, if you possess a good credit score, odds are you will be approved more. Many who have bad scores are turned down for auto loans, home mortgages, HELOCs, charge cards, and other loans. Folks with greater credit scores will possess more possibilities to pick which loan or card is right for them.

Insurance is another thing that can look at your credit score. If you desire to look for the least expensive rates, maintaining great credit can aid you. Many folks who have low credit scores are penalized by auto insurance companies, thus giving them higher premiums.

Another advantage of having a higher FICO score is that you will have an easier time obtaining a cellphone contract. Many are not aware that a bad credit score may mean a cellular service turning them away. Or they could charge you more for your contract until you have established good credit with them.

Many wonder what a decent credit score is. A FICO score of 670-739 is deemed good, while a score of 740-799 is very good. Anything 800 and over is exceptional.

You are probably wondering how a credit score is calculated. There are different elements that calculate what your score is. These things include how old the account is, how much is owed on the account, what your available credit is, and if payments were made on time.

Should you find that your credit score is less than you desire, do not fret. You can work on obtaining a higher score by paying your bills on time. If you have any negative marks on your credit report, know that over time, they will fall off. You will also want to keep your credit utilization ratio low. It is ideal to have this be 30% or less.

If you want to fix your credit score and are in the Clearwater area, contact Super Credit Repair. They can help you identify areas that need improvement to obtain a good credit score.

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Are you wondering how long the ‘late payment’ red mark will reflect on your credit report or how it can influence your credit score? Continue reading to find out answers to both your queries.

When is Your Payment Considered Late?
You’ll be regarded as a defaulter even if you pay just one minute after the due date and time. For instance, if your due date (of payment) is on the 5th of each month, you should pay latest by midnight on the 5th day of every month. Your creditor may allow you to clear payment within the grace period, which kicks in immediately after the deadline expires.

Many creditors or lenders offer this privilege (grace period) as a last resort to enable borrowers to avoid paying late fines.

How Long Do Late Payments Stay on Your Credit Report?
The blot of late payments generally remains on your credit for precisely seven years if it is not a mistake. Ensure you tender a dispute application if you spot an error in your credit report. The exact period the late payment blotch stays on a credit report could, by and large, vary from one person to another.

Go through the FICO (Fair Isaac Corporation) report to determine how much time it’ll take for your credit score to recover from late payments.

In What Way Late Payments Affect Credit Score?
Remember that late payment does not reflect on a credit report until it is 30 days overdue. Once outstanding late payment crosses the 30 days, your credit report is dropped into one of the following buckets: –

• 30-days behind schedule
• 60-days behind schedule
• 90-days behind schedule
• 120-days behind schedule
• 150-days
• Written off as a loss once late payment goes beyond the 150 days

The above shows that the longer you delay payment, the greater the damage to your credit score.

How to Mitigate the Adverse Effect of Late Payments?
As per a 2020 Experian report, nearly 1.5% of all borrowers have defaulted on their due payment by 30-180 days. Get in touch with your creditor to determine if their institution is willing to consider waiving the late penalty. The creditor may not insist on the late fine provided you’ve paid your previous EMI on time.

Your sole aim would be to clear (your dues) the maximum amount possible at the earliest as far as you’re concerned.

Avoiding Late Payments
Signing up for automated payments is best to avoid defaulting on your monthly EMIs. However, doing so could risk default, especially if you receive your salary well past the due date or don’t budget routinely. You can write down the due dates in a diary or mark the dates on an almanac if registering for autopay doesn’t work.

Everything You Need to Know About Credit Repair
You resort to credit repairing, especially when your credit report is incomplete or contains erroneous data or information. Preparing a credit report takes time, so it follows that it is also time-consuming to fix or correct a faulty credit report. To improve your flawed credit report, you first have to seek a credit report from Equifax, Experian, or TransUnion.

Based on the data contained in your credit report, this information may work in your favor or work against you. You’ve to do away with the negative aspects of the credit report, whereas positive items require monitoring. However, you should refrain from trying to modify or alter the information except if the data is inaccurate.

If you face issues with your credit score or find it tough to improve it, consult an expert credit repair agency. Super Credit Repair is one such organization with a team of experts who have been helping people manage their finances and improve credit scores in Pinellas County, FL. The company would evaluate your situation and provide the best ways to improve your credit scores.

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Effect of closed accounts on your credit score

The FICO credit score is decided by several factors such as your payment history, the debt you owe, and the average credit history length. There are other factors affecting the credit score as well such as credit mix and new credit. The credit bureaus compile all this info within the credit report. It is used to decide where the credit score lies. However, there are a couple of areas where the closed accounts can impact the credit score and they are the amounts you owe and the length of your credit history. Let’s take a look at how.

Some closed accounts can raise your credit utilization rates: If you close one of your credit card accounts, you will be reducing the amount of credit available. This will increase the credit utilization rate and can harm the credit score. Keep in mind that installment loans such as personal loans do not impact credit utilization. Therefore, closed personal loan accounts do not impact the rate of credit utilization.

Account closure means a decrease in the average length of credit history: Length of credit history is partially decided by the average age of all the accounts together. So, removing an account will decrease the average length of the credit history. It is going to affect the credit score negatively.

When to remove a closed account from the credit report?

Is it possible to remove the closed accounts from the credit report? For the most part, it is a good idea to remove closed accounts from the credit report when some negative info is reported. It is true especially when the negative details are incorrect. Luckily there are some alternatives available when you are looking to get certain info removed from the credit score or you are trying to get this info removed. Here is how.

1. Dispute the inaccuracies formally: According to CFPB it is possible to dispute the inaccurate info on the credit reports. You need to do it with the credit bureau and the company that provided the info.
2. Just politely ask for the info to be removed: When you do not have any incorrect info to dispute and yet you wish to remove a closed account, you can send a goodwill letter to the credit bureaus.
3. Wait for the negative info to disappear: Keep in mind that the closed account info on the credit report will eventually disappear. This negative info is removed after every seven years. The info about the closed account in good stead gets removed after ten years. In case you have tried to dispute the negative info without any success, sometimes you may have to wait till the issue corrects itself.

Do not bother sweating the small stuff as far as credit score is concerned

Keep in mind that the credit bureaus take into consideration your overall situation while deciding the credit score. They will not just take into consideration the closed accounts on your report. There are other more significant factors in regards to the FICO credit score such as your payment history and the debt you owe. So, you need to concentrate more on the effort to pay the bills on time and keep low credit utilization. Another way of improving the credit score is by not opening or closing too many accounts.

Good credit does not happen overnight. It is built slowly over the years and you can get the best results by concentrating on areas where you can deliver more impact. If you live in Pinellas County, FL area and are looking for professional help with credit score repair, connect with Super Credit Repair. Remember, older accounts on the credit report might be inconsequential however, how you take care of the credit will have an effect on your credit score for many years.

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Why is good credit important?

When you apply for a new credit card, your bank or lender will most likely check your credit score. If you have a good credit score, you may qualify for a lower interest rate, compared to someone who has a bad credit score. This can make a big difference in repayment costs over the length of the loan. For example, if you have a good credit score, you may qualify for a 12% yearly interest rate, while if you had a bad credit score, then you may only qualify for the 24% interest rate credit card. Mortgages and auto loans also factor in credit scores when it comes to giving you good or bad loan terms. Something that you may not have known is that even utility companies may check your credit score before giving you service. Another thing that you should keep in mind, is that landlords and employers may check your credit score before allowing you to lease their house or work at their company. This is why it is important to try and maintain a great credit score throughout your life.

What is a good and bad credit score?

One of the most popular methods that banks use to check a person’s credit score is searching up their FICO score. The FICO credit score is one of the most accurate representations of a person’s credit. Some factors that affect the FICO score are length of credit history, payment history, and total amount of debt. The lowest credit score a person can have is 300, while the highest is 850. You can use this information as an approximate reference, 300-580 is a poor credit score, 580-670 is fair, 670-740 is good, 740-800 is very good, and 800-850 is exceptional. This is a good estimation on where you might be in terms of your credit score rating.

What can I do to improve my credit score?

One of the biggest factors when it comes to improving your credit score is paying your bills on time and in full each month. If you have a credit card bill due on the 8th of the month, make sure that bill is paid on time consistently. Something that you can do is set up auto bill payments, this can help you make your payments on time each month just in case you forget to pay it. Another important factor when it comes to improving your credit score is to be aware of your current revolving utilization percentage. Revolving utilization has to do with the amount of credit you are given, compared to the amount that you actually use. For example, if you have a $1,000 credit card but only use $100, your revolving utilization percentage will be 10%. Try and keep your revolving utilization percentage under 30% if possible. If your revolving utilization percentage gets too high it may hurt your credit score, because you will be seen as a high risk borrower. The higher your debt is, the higher chance that you will default on your loan. One more thing you should keep in mind is the length of credit history can also affect your credit score. If you are a young person with a low credit score, try not to feel bad. With consistent on time payments your credit score will slowly begin to increase over time.

What are some things that may hurt my credit score?

Your credit score is very important and should not be taken lightly. One thing that can dramatically hurt your credit score is co-signing a credit card for a family member or friend. If this person pays on time then there should be no problem. The problems start to begin when the person you cosigned for starts paying their bills late, or stops paying their bills altogether. This is a situation that happens all the time, and you should be careful getting yourself into a bad dilemma. Think carefully before you decide to cosign a credit card for anyone, if they don’t pay, then it will be your credit score that will suffer. Another thing that may hurt your credit score is applying for too many credit cards in a short amount of time. Each time you apply for a credit card, the lender has to “pull” your credit, which may lead to a lower credit score in the short term. Over time if you don’t apply for too many credit cards, your credit score will slowly increase again. Another thing that many people don’t know is that there are sometimes mistakes on your credit report. It is important to double check your credit report every few months or so to verify the report is correct. Sometimes there may be mistakes that pop up on your credit report and these mistakes must be fixed as soon as possible. Don’t ignore these mistakes because they can really hurt your overall credit score.

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Basics of a FICO score

You may consider the FICO score to be the summary of a credit report. It will measure how long you had credit, how much credit you possess, and what is the available credit limit. It will also consider whether you are paying the repayment on time. The FICO score allows lenders to make faster and smarter decisions about who to loan the money to. It is also helpful for people to get quick and fair access to credit when it is needed. As the FICO scores are calculated depending on the credit info, it is in your hands to influence your score if you are paying the bills on time. It will also help if you are not carrying a large amount of debt and you are making intelligent credit choices.

The arrival of the FICO score

FICO or Fair Isaac Corporation introduced the FICO score almost thirty years ago for providing an industry-standard to score the trustworthiness of a borrower. The score is fair to both consumers and lenders. There were several different scores in existence before the arrival of a FICO score and all of them had different ways of calculating credibility. Some of them even considered political affiliation and gender.

Significance of FICO scores

There are millions of people benefitting from the FICO scores. It allows them to gain access to a credit they require for doing things such as getting an education, covering medical expenses, and buying their first homes. Some of the utility and insurance companies will also consider the FICO score while setting up their terms of service. The fact remains that having a good FICO score can save thousands of dollars in fees and interest. This is because most lenders will extend a lower interest rate when you appear to be a lesser risk to them.

Overall, the FICO scores are fast, consistent, predictive, and fair scores that help in keeping the cost of credit lower for the whole population. If the credit is more accessible, more lenders can lend the money and they are more efficient in their procedures. All this results in driving down the costs and passing on the savings to the borrowers.

Difference between other credit scores and a FICO score

Fair Isaac Corporation is only responsible for creating the FICO scores. These FICO scores are utilized by more than 90% of the top lenders when they are making their lending decisions. The reason? This is because FICO scores are industry standards while making fair and accurate decisions related to creditworthiness. FICO scores help thousands of people in getting the credit they require for new cars, homes, or other special buying. You might have seen advertisements for some other kinds of credit scores. You may have even bought some of them in the past. But these credit scores evaluate your score differently from the FICO score. Therefore, as the other scores may appear similar to the FICO scores they are not.

Different lenders decide what a good FICO score is for themselves. They also use this FICO score differently together with their loan approval process. Generally speaking, most lenders find a FICO score above 670 to be having good creditworthiness. Usually, the higher you score, the lesser is the risk involved and there are more chances of creditors extending a loan to you. The general score ranges established by various creditors allow them to make their lending decisions. They also act as targets for you to achieve. If you live in Clearwater, FL, or Pinellas County, and you are looking for in-depth information about FICO and your credit scores, get in touch with Super Credit Repair for an expert opinion.

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You might wonder how long it takes to increase a credit score. Let us be clear that it does not happen instantly but by following the suggestions below, you can improve your credit score in a couple of months.

Know The Date When The Issuer Reports Payment History

Give your credit card issuer a call and know about the dates when your balance is reported to the credit bureaus. It is usually the closing date or the statement date and not the due date on your statement.

The credit utilization ratio reflects the ratio between the amount of credit approved to you against the amount of credit available. The ratio is available for your cards both collectively and individually.

The recommended ratio for both cases should be less than 30%. However, if you are looking to boost your score, bring it under 10%. You must be paying off your balance each month but always make sure you do so before the reporting date. If it is after that, your reported balance might be higher and can negatively impact the ratio.

Strategically Reduce Your Debts

To explain this, let us take an example. For instance, you might have 2 credit cards with a utilization ratio of 40% and 10% respectively. FICO score will consider the ratio for both your cards individually. Hence, to quickly increase credit score, consider paying down the card that has a higher balance i.e., the one with 40% utilization.

Make Payments at Least 2-3 Times a Month

If in recent times you had a rough time dealing with your finances with some unanticipated expenses. You might have used your card to fund those expenses. Doing so can temporarily throw the utilization ratio and drastically pull down the credit score. Hence, a good idea would be to make payments two weeks before the closing date and another one just a couple of days before.

Avoid using a credit card to pay off a big bill if you are planning to carry a balance. The compound interest can surprisingly increase your debts quickly. You should not be using your cards for long-term loans unless there is a card that comes with a 0% introductory APR on purchases. Even in such cases, it is advisable to make a payment before the intro period expires.

Increase Your Credit Limits

Strictly not for those who have a habit of overspending. The idea to get your credit score increased on your cards is to bring down your utilization ratio. However, it is only helpful when you do not end up using the increased credit limit. Additionally, this suggestion will not be helpful if you had missed payments recently or your credit score declined in the past month.

For a credit issuer, this might be an indication that you have a financial crisis and looking for extra credit. It could eventually make them rethink and decrease the credits. Therefore, analyze your situation before trying this suggestion.

Mix Your Credit Options

If we review our mix of credits, most of us might realize that we do not have the right mix. You might have credit cards with low utilization ratios along with a mortgage where you had missed an installment a few years back. Here you might think of taking a car loan at a low-interest rate to raise the score a bit. Initially, the score might drop, but after 5 to 6 months, it will start improving. A credit mix is only 10% of the FICO score but little efforts like these can push your credit from good to excellent.

Final Thoughts

To keep things simple, boosting your credit score needs disciplined effort and following basic rules. The two important ones are:

• Maintain Low Credit Card Balances
• Pay Bills on Time and preferably in full

Always remember carrying a balance would never help to build a good score. Doing so can negatively impact your credit health. You might consult our financial experts at Super Credit Repair if you are living in and around Clearwater, FL. We can help you deal with financial planning and guide you to increase your credit score.

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This was not always the case. In much of the history of the United States, purchasers of houses would pay for such houses with cash or actual funds. The introduction of mortgages, and the governmental subsidization of the mortgage industry, has according to numerous analysts, caused the inflation of the price of houses. Such price inflation has created a condition whereby most prospective home buyers in the United States must procure a mortgage in order to purchase a house.

A similar dynamic occurred in higher education in the United States. Before the introduction of student loans, the price of a college or university education was relatively inexpensive. The colleges and universities were forced to control their costs due to the limited resources of its prospective students. Many college students were able to raise the funds to pay tuition simply by working in the summer.

For example, if the average college student, through work, collected savings, and family support, was able to pay $3,000 per year in tuition, and outside sources of funding did not exist, the colleges and universities would restrain their costs and expenses to accommodate the funds available to such students. However, if the average student, in addition to the $3,000 per year in available funding, was given a $10,000 in addition funds through student loans, the college or university will likely expand its costs in recognition of the additional monies available.

This is exactly what happened. Tuition that was once $3,000 per year is now $13,000 per year, or more. This is the same dynamic that has occurred in home pricing. This is the same dynamic that has occurred in various segments of our economy, including the medical industry. In each of these industries, the cost of the service or product has generally greatly exceeded the cost of inflation.

The reality is, however, that most persons seeking to buy a house in the United States must seek to obtain a mortgage. Otherwise, such purchase is largely unattainable.

A mortgage is a loan specially used to finance the purchase of a house. Factors to consider when applying for a mortgage include available down payment, one’s credit score and how that affects interest rates, and consequently, monthly payment obligations and the total cost of the mortgage, the burden of taxes associated with ownership of a house or home, and the cost of insurance.

A conventional mortgage for a home insured by Fannie Mae or Freddie Mac in the year 2018 will require a minimum credit score of 620. The lowest credit score to obtain a FHA or Federal Housing Authority loan, is 580. FHA will insure an applicant with a 500 credit score but the applicant must tender at least 10% of the purchase price as a down payment. If the applicant has a least a 580 credit score, the applicant will need as little as 3.5% down payment. It appears, however, that an applicant will a higher credit score (580+) and a smaller down payment is more likely to secure the mortgage than an applicant with a low credit score (500) and larger down payment.

Currently, a VA loan requires a 620 credit score, although some lenders may permit 580. A USDA loan requires at least a 640 credit score.

These are minimum scores. Such minimum scores do not guarantee that an applicant will secure a mortgage with such credit scores. In fact, such credit scores are generally considered to be in the range of fair or bad credit.

Generally, a credit score of 750 and above is considered excellent. A credit score of 700-749 is considered good, a credit score of 650-699 is considered fair, 550-649 is poor, and 550 and below is bad.

All credit scoring has a range of 350-850. A credit score of 740-750+ generally garners the best interest rates available to lenders. A credit score of 680-739 is the score held by most homebuyers. A credit score of 620-679 may raise one’s interest rate about 0.5% above the rate paid by those with the higher credit ratings. At 580-619, the interest rate may climb an additional 1% and 579 and lower, an additional 2%.

These are figures reflecting home lending in 2018. Such guidelines are subject to change. The government will tighten and loosen lending regulations and lending criteria based upon various factors, most prominently that state of the greater economy, and the housing industry.

The housing crash beginning at the end of 2005 and continuing at least through 2007-2008 was partly caused by the loosening of lending standards whereby persons with poor credit were readily provided with subprime loans. Many of these loans carried adjustable interest rates, balloon mortgages, and other devices. Many loans did not require any form of income verification.

Many lenders and mortgage brokers represented to the buyers that such devices were unimportant because the rapidly accelerating home prices would ensure that the buyer could refinance the home in a few years, escaping the adjustable rate mortgage, and other subprime devices. When the market crashed many buyers were left with homes that had a fair market value which was less than 50% of the mortgage balance.

In 2010, President Obama signed the Dodd-Frank Act which purported to tighten the requirements to procure a home mortgage. Applicants with low credit scores were particularly affected.

One’s credit score depends upon a number of factors. The first factor is which credit score the lenders are using. The FICO score, created by Fair Isaac, is the predominant scoring model used in the housing industry. Approximately 90% of the mortgage lenders use FICO.

There are five main factors that determine a FICO score, and each factor has its respective weight or importance. 35% of the FICO score is determined by payment history, 30% by credit utilization, 15% by credit age, 10% by different types of credit, and 10% by number of inquiries.

An alternative to the FICO scoring system is Vanguard. Vanguard was developed by TransUnion, Equifax, and Experian, and is becoming more popular among lenders. Vanguard considers such factors as the amount owed, age of accounts, and payment history.

Both FICO and Vanguard put heavy emphasis on payment history. Therefore, it is important for credit score purposes that any debt taken be paid promptly and fully.

Lenders can and will take into account factors other than the FICO or Vanguard credit scores. Such factors include whether the applicant has stable employment, the length of the employment, and the annual income of the applicant.

Such compensating factors may aid an applicant with bad credit in obtaining a home mortgage. Likewise, an applicant with a good credit score may be harmed by unstable or unsteady employment, and low income.

Other factors that may be relevant in obtaining a home loan, other than credit score, may include low debt to income ratio, high income, a large amount of money in savings, assets, and the size of the down payment.

What are the factors that can assist in obtaining an affordable mortgage?

Collect the documents and information that are generally required when applying for a home mortgage. Among the documents generally required are tax returns from the last year, bank statements, pay invoices, investment or retirement account statements, W2s, and a list of the applicant’s debts, included the amounts owed and monthly payments.

Co-signors may be helpful, especially if the co-signor has a good credit rating. A family member or close friend may be willing to co-sign the mortgage or loan. Additionally, a family member or close friend may be willing to add the applicant as an authorized user to one of their accounts. Some estimate one’s status as an authorized user can increase the credit score as much as 30 points.

Paying down one’s debts generally will have a beneficial impact on one’s credit score. Lenders generally like applicants who have a debt to income ratio of less than 30%. Debt to income ratio is an important consideration given by lenders.

Fix your credit. According to the Federal Trade Commission, 20% of Americans have an error on their credit report. Disputing inaccurate information and removing bad remarks can help one’s credit dramatically. Some creditors will also agree to a “pay for delete” arrangement whereby the creditor will remove a damaging remark upon payment of the obligation.

Provide other documentation showing that the applicant is a responsible consumer. For example, utility bills for the last 12 months, a letter of recommendation from a landlord, or evidence of insurance premium payments, or automobile payments can illustrate that the applicant is prompt and responsible in the payment of his or her debts.

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