The U.S. economy is only just now beginning to look as though it is really recovering from the financial crisis and the Great Recession, but an announcement by the credit rating firm FICO last week suggests that some of the lessons of the crisis might not have truly sunk in.
In short, with no change in their financial circumstances, many millions of consumers can expect their credit scores to suddenly go up around the end of the year. FICO reported last week that it will change the way it treats medical debt and debts that were sent to collection and subsequently paid off.
Those who remember the mortgage crisis, which helped launched the aforementioned financial crisis, will recall that much of the problem was that lenders were offering credit to individuals who probably shouldn't have been getting loans. These bad loans were then bundled together and sold to investors, many of whom were unpleasantly surprised at the number of them that went into default.