“Collections do not count” is too broad a claim. Newer scoring models approved for certain mortgage uses treat paid collections differently from unpaid ones, and they reduce the impact of unpaid medical debt. But the available sources do not say how many points any one account changes, or predict what a particular person’s score will do.
What changed in the mortgage scoring models
In October 2022, the Federal Housing Finance Agency (FHFA) announced that it had validated and approved FICO 10T and VantageScore 4.0 for use by Fannie Mae and Freddie Mac. Those are the two government-sponsored enterprises that buy most US mortgages. The approval describes mortgage-related use by those enterprises. It does not establish that every lender uses either model, or when a particular lender may use one.
According to the National Consumer Law Center (NCLC), both models leave paid collection items out of the score calculation and reduce the impact of unpaid medical debt. “Reduce” does not mean erase. An unpaid nonmedical collection is not covered by that specific description of the models’ treatment of medical debt. And the source does not give a point estimate for any category.
FHFA chose to require both models rather than let each lender select one. NCLC supported that choice, saying a “Lender Choice” approach could allow one model to crowd out the other. That is the consumer advocacy group’s policy view, not a neutral finding about the outcome. FHFA also decided that Fannie Mae and Freddie Mac need only require two of the three nationwide credit reports, rather than all three. The report-count decision is separate from how a scoring model treats an account. NCLC’s account of the model changes explains its view of the decision, while FHFA’s credit score page provides the agency’s overview.
Start with the account, not just the score label
A collection account generally appears after an unpaid account is sent to a collection agency. For credit card accounts, this can happen after about 180 days without payment, according to myFICO’s explanation of collections. That timing is not a universal rule for every type of debt.
The original creditor or the collection agency may report the account. myFICO also distinguishes an outside agency’s third-party collection from a first-party or internal collection handled by the creditor’s own employees. Those details matter when interpreting what appears on a report. The effect on a FICO Score can depend on how the credit reporting agencies report the item and how the scoring model handles third-party collection information. The treatment has changed over time, so one general statement may not describe every account and model.
Myth check: A collection appearing on a report does not tell you, by itself, how much it will affect every score. myFICO says the impact of derogatory information on a FICO Score gradually lessens as it ages on the report. That is a description of a general scoring pattern, not a calculation for a specific file.
Medical debt has a separate policy history
Medical debt has been shaped by both credit bureau policies and federal rulemaking. A secondary health-services guide says the three nationwide bureaus adopted voluntary policies in 2022: medical debt generally would wait until it was at least a year delinquent before reporting, paid medical debt would be removed, and medical collection debt under $500 would be left off reports. The guide says those changes took effect in spring 2023. These are bureau policies as described by that secondary source, not a federal law, and the underlying bureau policies are not included in the source set.
There was also a federal rule. The Consumer Financial Protection Bureau (CFPB) finalized a rule on January 7, 2025, that would have barred most medical debt from credit reports and restricted lenders’ use of medical information. A federal court vacated the rule on July 11, 2025, finding that it exceeded the Bureau’s statutory authority and conflicted with the Fair Credit Reporting Act. As of the sources available for this article, there is no federal rule that bans medical debt from credit reports. The CFPB announcement describes the rule as finalized, while the later court action changed its status.
The CFPB said the vacated rule would have allowed medical debt information to be furnished and used under the Fair Credit Reporting Act if it did not identify the specific provider or nature of services. A later CFPB interpretive rule, dated October 28, 2025, is described only in the secondary guide. That account says the CFPB interpreted the federal law as preempting state laws about credit report contents. It also says the CFPB considers its interpretation nonbinding and that courts will decide the question. The interaction between state rules and federal law therefore remains unsettled in these sources.
Questions that make the score steps clearer
When a collection is part of a credit or mortgage discussion, several separate questions can help explain what the available information does and does not establish:
- Which scoring model is being used, and does that model treat paid and unpaid collections differently?
- Is the item a third-party collection or an internal collection, and did the original creditor or an agency report it?
- How old is the item, and what does the report show about its status?
- If it is medical debt, is it paid, how much is it, and how long has it been delinquent?
These questions identify relevant facts. They do not produce a guaranteed score outcome. The FHFA announcement concerns model approval for Fannie Mae and Freddie Mac use. The sources do not identify which lenders have implemented the models or provide implementation dates. The voluntary medical debt thresholds also come from a secondary guide, so they should not be treated as a complete statement of every bureau’s current policy.
What the sources do not settle
There is no supported number for how much a collection typically lowers a score, and no source here estimates the score change for an individual under the newer models. Claims of a fixed point loss or a promised increase go beyond this evidence. The NCLC release is advocacy material, and its support for FHFA’s choice should be understood in that context. A VantageScore page about the model is published by the company that sells it, so claims there also warrant attention to the source’s perspective.
The source set does not explain the steps for disputing an account, give a detailed process for removing a paid collection, or map state medical debt laws. It also does not confirm the secondary guide’s estimate that the voluntary medical debt changes removed about 70% of medical debt from reports. A useful source trail keeps these limits visible: model rules describe categories, report details describe an account, and neither alone promises a particular score result.
Please seek a professional. This article is general information, not financial, tax or insurance advice. Please seek a licensed financial, tax or insurance professional about your own situation.
