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Credit score changes targeted medical debt

The way that credit scores are determined was altered back in 2014. While the alterations were not huge and many consumers may not have seen a massive shift, they did attempt to make it so that people could get lines of credit more easily. One way that the changes did this was by focusing on medical debt.

They didn't eliminate the impact of medical debt. It still makes your score lower, like it always has. However, it used to be weighted far higher than it is now.

The goal here was to avoid punishing people for things they couldn't control, while keeping scores low for those who were responsible for their own debt. Medical debt is often something a person has no control over, but it's a leading cause of bankruptcy, and some debts are so big people probably will not ever pay them down to zero.

Was it really fair to penalize people the same way if they had millions in outstanding business debt that they chose to take out or if they had millions in medical costs due to cancer? The credit companies decided it wasn't, and so they changed the algorithm as a result.

It could be argued that some medical debt is controllable. For instance, someone who is injured while rock climbing or skydiving had a choice in doing a very dangerous activity. However, much medical debt comes about because of accidents that were someone else's fault or because of disease.

If you have a lot of medical expenses, be sure you know how these changes impacted you and what options you have in Ohio.

Source: Consumerist, "Medical Debt Still Stinks, But New Credit Score Change Will Make It Hurt Your Life Less," Kate Cox, accessed July 27, 2015

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