portunities. They find themselves with large 
amounts of debt and, too often, end up in de-
fault. In many cases, students are drawn into 
these programs with confusing or misleading in-
formation.’’. 
(7) MEDICAL DEBT.— 
(A) The Bureau’s research on credit re-
porting and credit scoring has found that the 
inclusion of medical debt collection information 
on consumer reports has unfairly reduced con-
sumers’ credit scores. 
(B) The Bureau’s review of 5 million 
anonymized credit files from September 2011 to 
September 2013 found that credit scores may 
underestimate a person’s creditworthiness by up 
to 10 points for those who owe medical debt, 
and may underestimate a person’s creditworthi-
ness by up to 22 points after the medical debt 
has been paid. For consumers with lower credit 
scores, especially those on the brink of what is 
considered subprime, a 10 to 22 point decrease 
in their credit scores can have a significant im-
pact on their lives, including by affecting 
whether they are able to qualify for credit and, 
if so, the terms and conditions under which it 
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is extended to them. The differences in peoples’ 
credit scores because of medical debt could un-
fairly cost them tens of thousands of dollars on 
large loans such as mortgages. 
(C) The Bureau found that half of all col-
lections tradelines that appear on consumer re-
ports are related to medical bills claimed to be 
owed to hospitals and other medical providers. 
These tradelines affect the credit reports of 
nearly 1⁄5 of all consumers in the credit report-
ing system. 
(D) The Bureau concluded that there are 
no objective or enforceable standards that de-
termine when a debt can or should be reported 
as a collection tradeline. Because debt buyers 
and collectors determine whether, when, and for 
how long to report a collection account, there is 
only a limited relationship between the time pe-
riod reported, the severity of a delinquency, and 
when or whether a collection tradeline appears 
on a consumer’s credit report. 
(E) Medical patients may be uncertain 
about what they owe, to whom, when, or for 
what, causing some consumers who ordinarily 
pay their bills on time to delay or withhold pay-
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ments on medical debts. In many instances, 
consumers’ uncertainty about medical bills can 
result in medical debt collections appearing on 
their consumer reports. In a December 2014 re-
port titled ‘‘Consumer Credit Reports: A Study 
of Medical and Non-Medical Collections’’, the 
Bureau found that a large portion of consumers 
with medical debts in collections show no other 
evidence of financial distress and are consumers 
who ordinarily pay their other financial obliga-
tions on time. Unlike credit cards, installment 
loans, utilities, or wireless or cable services that 
have contractual account disclosures describing 
terms and conditions of use, most consumers 
are not told what their out-of-pocket medical 
costs will be in advance. Consumers needing ur-
gent or emergency care rarely know, or are pro-
vided, the cost of a treatment or procedure be-
fore the service is rendered. 
(F) The Bureau concluded that the pres-
ence of medical collections is less predictive of 
future defaults or serious delinquencies than 
the presence of a nonmedical collection in a 
study titled ‘‘Data Point: Medical Debt and 
Credit Scores’’ issued in May 2014. 
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(G) In March 2013, VantageScore released 
a new credit scoring model (VantageScore 3.0) 
that excludes all paid collections. In April 2014, 
FICO announced that its new credit scoring 
model (FICO ’09) excludes any record of a con-
sumer failing to pay a bill if the bill has been 
paid or settled with a collection agency and also 
gives less weight to unpaid medical bills that 
are with a collection agency. Many Americans, 
therefore, could see significant improvements in 
their credit scores if creditors and lenders used 
the latest versions of credit scoring models that 
treat medical debt differently. 
(8) FINANCIAL ABUSE BY KNOWN PERSONS.— 
(A) Financial abuse is frequently associ-
ated with domestic violence. Financial abuse in 
a relationship may result in fraudulent charges 
to a credit card, or having fraudulent loans 
taken out or accounts created by the abuser in 
the survivor’s name. Financial abuse may also 
result in the survivor’s inability to make valid 
payments because of lost income when the 
abuser steals from or coerces the survivor to re-
linquish their paychecks. 
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(B) By racking up substantial debts in the 
survivor’s name, abusers are able to exercise 
control and make it harder for the survivor, 
whose credit is often destroyed in the process, 
to escape. 
(C) Domestic abuse survivors with tar-
nished credit reports are likely to face signifi-
cant obstacles in establishing financial inde-
pendence from their abusers. This is because 
credit reports often determine a consumer’s 
ability to obtain a checking account, housing, 
insurance, utilities, employment, and even a se-
curity clearance as required for certain jobs. 
(D) While in many cases, identity thieves 
are individuals who are actually known to the 
survivor, providing documentation of identity 
theft in order to dispute information on one’s 
consumer report can be particularly challenging 
for those who know their financial abuser. 
(E) While it is easier for consumers who 
obtain a police report to remove fraudulent in-
formation from their consumer report and pre-
vent it from reappearing in the future, accord-
ing to the Empire Justice Center, safety and 
other noncredit concerns may prevent a survivor 
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of financial abuse involving a known person 
from involving the police. 
(F) According to domestic violence advo-
cates at the Legal Aid Society in New York, do-
mestic abuse survivors seeking to remove ad-
verse information stemming from financial 
abuse by contacting their creditors directly are 
likely to face skepticism about claims of identity 
theft perpetrated by a spouse because of an as-
sumption that the individual was aware of and 
may have been complicit in the activity which 
the survivor alleges stems from financial abuse. 
(9) GSE’S IMPACT ON THE USE OF UPDATED 
VERSIONS OR ADDITIONAL CREDIT SCORING MODELS 
BY MORTGAGE LENDERS.— 
(A) Despite innovation in understanding 
consumer behavior and credit scoring analytics, 
many creditors and lenders, particularly mort-
gage lenders, continue to use older versions of 
credit scoring models and algorithms. 
(B) Lenders that originate residential 
mortgage loans generally adhere to the under-
writing guidelines set by Fannie Mae and 
Freddie Mac, which reference the 2004 FICO 
credit scoring model (developed more than a 
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decade ago), not the most recent version devel-
oped in 2009 (that was released in 2014). 
(C) Despite changes in recent years to 
credit scoring models offered by major credit 
scoring developers VantageScore and FICO to 
reflect current research about consumer behav-
ior and creditworthiness, it is likely that paid 
collections (medical or otherwise) will continue 
to be factored into the risk level of each con-
sumer shopping for credit because only a small 
percentage of creditors may actually be using 
the latest models. 
(10) CONSUMERS’ CONFUSION
ABOUT
CON-
SUMER REPORTS AND CREDIT SCORES.— 
(A) A July 2011 Bureau report titled 
‘‘The Impact of Differences between Consumer- 
and Creditor-Purchased Credit Scores’’ found 
that the credit scores made available to and 
purchased by consumers are unlikely to be the 
same credit scores used by creditors and lend-
ers. 
(B) That report found that the scarcity of 
public educational tools to inform consumers of 
the differences among credit scores, the large 
combined market share and brand recognition 
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