🎯 Your Credit Score’s Getting a Facelift (And Why You Should Care)
Thursday, March 27, 2025
🎯 Your Credit Score’s Getting a Facelift (And Why You Should Care)
Hey there!
Ever had that moment when you look in the mirror and notice something’s... different? Well, your credit score is about to have one of those moments—except you won’t see it coming unless you’re paying attention.
Quick Story...
Last week, a client lost their dream home because they didn’t see these changes coming. Their credit score took an unexpected dive—all thanks to those "harmless" Buy Now, Pay Later (BNPL) shopping sprees. (You know, those tempting “pay in 4” deals? Yeah, those.)
Here’s What’s Changing in 2025 (And Why You Should Care)...
💳 Big Change #1: Buy Now, Pay (for it) Later—On Your Credit Report
BNPL loans used to be like your sneaky midnight snacks—invisible to the outside world. Not anymore.
🔹 FICO is now including BNPL loans in your credit score.
🔹 Good news: Paying on time could help your score (especially if you’re building credit).
🔹 Bad news: These loans are short-term, meaning they could lower your average account age—one of the biggest factors in your credit score.
🔹 Worse news: They also increase your debt-to-income ratio (DTI), which mortgage lenders do NOT like. If you're planning to buy a home, these little loans might be quietly shrinking your approval amount.
📊 Stat Check: A FICO study found that 85% of BNPL users saw their scores shift by about 10 points, with some improving and others dropping. (Bloomberg)
🚨 Real Talk: If you’re using BNPL to buy a $200 pair of sneakers, but it costs you a home loan down the road... worth it?
🏥 Big Change #2: $49 Billion in Medical Debt—Poof, Gone.
For 15 million Americans, medical bills have been a credit score leech. But thanks to the Consumer Financial Protection Bureau (CFPB), that’s about to change.
🔹 Starting March 17, 2025, medical debt will no longer appear on credit reports.
🔹 Expected credit score boost: ~20 points for many people.
🔹 Bonus: This could help 22,000+ additional homebuyers qualify for affordable mortgages every year.
📊 Stat Check: A White House report found that 1 in 5 U.S. households had medical debt affecting their credit scores. (White House Archives)
🚨 But hold on...
This doesn't erase the actual debt. It just stops it from wrecking your credit score. Think of it like hiding junk in your closet before guests come over—it looks good, but the mess is still there.
📊 Big Change #3: Mortgage Lenders Are Switching How They Score You
Right now, mortgage lenders pull a tri-merge report (Experian, TransUnion, and Equifax). That’s about to switch to a bi-merge system using VantageScore 4.0 and FICO 10T.
🔹 Potential upside? Some borrowers might see a slight credit score boost.
🔹 Potential downside? Not all lenders will adopt this right away—it’s optional, not required.
🔹 Biggest unknown? The rollout date. Originally set for late 2025, now it’s TBD.
📊 Stat Check: 70% of U.S. mortgages are backed by Fannie Mae and Freddie Mac, which means this shift could impact the majority of homebuyers—if it actually rolls out as planned. (Consumer Finance Gov)
🚨 Translation: Some lenders will embrace the new system, some won’t, and you might end up playing mortgage roulette.
Want the Full Story? Listen to the Podcast 🎧
Here’s Why I’m Telling You This...
I’ve seen too many people lose out on homes because they got blindsided by credit changes. But my clients? They stay ahead of the game. They get better rates. They get approved.
Want to know where you stand before these changes hit?
📌 Reply "CREDIT CHECK" to this email
📌 Let’s schedule a quick 15-minute strategy call
📌 Get your game plan BEFORE these changes screw up your approval odds
2025’s credit shifts could either be a glow-up or a blow-up. Let’s make sure your score works for you, not against you.
Here for you,
Keith Goeringer
