For those of you who invest in starter homes, fix them up then flip, it might be easier for your buyers to qualify than it used to be. That’s welcomed news as the pendulum swung so far to the “No” category it kept many buyers at bay. Even FHA loans, not necessarily relegated to first time home buyers butnew fico scoring model number nine an ideal option for adjusted their fees to the point that conventional products may be as competitive as FHA loans are.

Yet the potential changes in store widening the buyer pool has less to do with the mortgage program but how FICO scores will change.

FICO has adjusted its scoring model several times over the years since mortgage companies adopted the scoring model to approve loans. Lenders not only use FICO scores to approve loans but to assign interest rates. Higher scores get lower rates and vice versa. The latest entry is called FICO 9, representing the ninth in the series of scoring tweaks.

The latest changes involve medical accounts and paid collections. Way before scoring was ever applied, underwriters typically wrote off or otherwise gave less weight to medical collection accounts due to the way insurance handles payments. Borrowers must meet deductibles for different services, co-pays can vary based upon a provider or prescription and many times borrowers even weight until an account hits collection as the process is so confusing. FICO made it official giving medical collection accounts less weight than other types of collections.

And speaking of collections, in the past, paying an old collection account actually harmed a credit score. That’s counterintuitive but any recent activity on a collection account whether from the consumer, the creditor or the collection agency lowers a score. An outstanding collection account with no activity at some point will fade in the past and have little effect on a score. FICO number 9 removes the stigma and actually rewards delinquent borrowers to pay off collection accounts instead of leaving them alone.

The next phase is to wait and see how lenders view this new entry. Lenders are still a bit paranoid these days but should soon adopt these new standards. All it takes is one major lender to begin using FICO 9 for the industry to wholly adopt the new standard.