American consumers will be delighted to learn that they could avail of loans and credit cards at lower rates starting this fall.

U.S. top credit score provider Fair Isaac Corporation (FICO) will change its current process in computing scores to boost credit ratings of many borrowers. In addition, FICO intends to assist lenders in conducting better assessment of a debtor's creditworthiness.

Like Us on Facebook

FICO announced on Thursday that it will apply less weight to medical debt under the new scoring system. 

The discounts will give a 25-point increase in the company's median score for consumers with unpaid medical bills. FICO also said that medical payments that have been paid off will be ignored during credit risk assessment.

The calibrated system will aid in identifying risky borrowers and help lenders lessen the risk of doing business with such these questionable clients, said credit expert John Ulzheimer.

According to the U.S. Consumer Financial Protection Bureau, consumers can get medical debt for different reasons. These instances may include incidents when individuals do not realize they owe money, which may be brought about by confusion over the amounts covered by insurance companies with respect to medications and procedures.

These consumers may pay the debt immediately after realizing the situation. However, the situation will still be regarded as a "hit" in their credit record.

Following the economic crises on the late 2000s, many lenders have only approved borrowers with few or no blemishes on their credit reports.

To end the era of tight lending practices, FICO's new rules increase chances for borrowers to pay at lower rates or get their loan applications approved, especially for those who were shut out of the market or charged with high interest rates because of low credit scores.

Approximately 64.3 million U.S. consumers had medical debts as of July. This data is in accordance with a report from MSN News.

Moreover, out of 106.5 million consumers, 9.4 million had no balance for medical collection in their medical report. Therefore, these consumers will not be facing penalties soon.

Senior analyst Greg McBride said that although the move carried by FICO will bring a positive impact for consumers, it will still have lesser effect on credit and borrowing. The measures taken should not be viewed as a jet fuel for the economy by any means.

TagsFICO, Consumer Financial Protection Bureau, John Ulzheimer