How TRUMP Is Changing YOUR Credit Score FOREVER

so you may have seen a few videos on YouTube recently saying this is how Trump is changing your credit score now whether Trump himself is responsible for all these changes is highly debatable but the Trump Administration is certainly a factor in how several of these rule changes are going to play out especially because they seem intent on dismantling the Consumer Finance Protection Bureau or cfpb but anyway in this video I want to go through the three major changes that all these videos about Trump and credit scores are talking about in an easy to understand way hey credit Warriors welcome to the show my name is Ben Hedges on this channel I cover all things credit and personal finance to help you get the most out of your money if you like the sound of that please do subscribe to the channel but otherwise let's get into it so the first major change to how credit scores work in 2025 is buy now pay later loans to report to credit reports now FICO have announced that they will be including in their credit scoring models buy now pay later accounts like a firm clor you know those pay in for things that you see at the checkout on many websites they conducted a study last year on how adding data on these types of loans would affect people's credit scores and that is now done quote the study found that for the over 85% of consumers who had opened a new bnpl account there was generally a consistent impact on their FICO scores it also found that impacts on FICO scores predictiveness ranged from Modest Improvement to no adverse first impact across a range of different use cases in other words it doesn't seem to screw up people's credit scores too much if they add in data from these types of loans and thus they are going to go ahead with it and do it saying this in a press release based on learnings from this industry-leading analysis FICO is developing a solution to introduce its proprietary treatment of bnpl data to the credit scoring Marketplace FICO will be releasing more information on this exciting product development soon so it's going to be coming out sometime soon probably this year now while they make it sound fine there are some concerns though these are short-term loans often with periods of 6 months to a year will that shorten the average age of accounts on your credit report and thus lower your score maybe they've created a special algorithm for that that treats these loans differently I'm not sure then another consideration which isn't to do with the credit score but to do with something else is that if you have extra payments that you have to make each month showing on your credit report then that increases your debt to income ratio or DTI now this could affect you if you are trying to buy a house with a mortgage or buy a car with a car loan since if more debt payments are showing up on your report versus your income then that is less money left over from your income that could be used to pay your mortgage and mortgages have maximum debt to income ratios that they're willing to approve okay so let's say it's 30% well if you get a couple of extra percentage points of debt uh from a you know by paying for or buy now pay later loan then that's going to reduce the amount of you know money you have to play with uh for your mortgage so it could be a negative for consumers in the past these loans were like kind of secret debts similar to how you could have a balance on a business credit card and it wouldn't show on your personal credit report but as of this year that will apparently be no more because a firm Etc will be showing up on credit reports sometime this year the flip side though is that if you are someone with a thin credit file then having these extra accounts show up and making the payments on time having that report it could in theory help increase your credit score all right let's now look at the second major change medical bills to be removed from credit reports all right so for this one the cfpb finalized a rule back in January to remove medical bills from credit reports here is what they say today the Consumer Finance Protection Bureau or cfpb finalized a rule that will remove an estimated 49 billion dollar in medical bills from the credit reports of about 15 million Americans the cfpb's AC will ban the inclusion of medical bills on credit reports used by lenders and prohibit lenders from using medical information in their lending decisions so the idea of this is that hey you got sick you have debts but it's not really your fault so it shouldn't really be held against you just because you didn't pay your $50,000 medical bill for that emergency surgery you needed doesn't mean you won't pay your mortgage each month now this rule was actually made before Trump came into office so I don't know why all these videos are saying Trump is changing your credit score and the rule will go into effect 60 days after it was published in the Federal Register and it seems the date for that is going to be March 17th so that is when you should see medical debt coming off credit reports now the Trump Administration has been cutting a lot of the cfpb's functions but since this rule is already on the books in theory it should go into effect but there are already at least two lawsuits protesting against this new rule so see what happens on March 17th all right now for our final major change mortgage lenders switching to Vantage score 4.0 and FICO 10t all right so this has also been in the works for a while so I'm not sure what the Trump Administration has to do with this one either but this year Fanny May and Freddy Mack the two government-backed mortgage lenders that are behind 70% of the US mortgage Market are supposed to switch from doing what is called a trimerge of Experian Transunion and Equifax FICO stores into a buy merge of Vantage score 4.0 and FICO 10 T now if you look at the charts that are supplied along with this the difference isn't huge but it seems that using Vantage score 4.0 will lead to a slightly higher score in some cases so the banks may like this because it means more people will qualify for their mortgage products but another key thing is this is optional delivering a Buy merg credit report is optional and lenders can choose to continue with the trimerge report so it's not even guaranteed that every bank will use this and things could just keep going as normal this was was supposed to come out in the last quarter of 2025 but it seems now that the time scale has changed to TBD to be determined so this is another one where you can make it sound like a big change but it's potentially a nothing burger and will perhaps be mildly beneficial if it does happen since a few more people may get approved for mortgages in my opinion the biggest of these is the medical debt thing okay that could really help a lot of people if it goes through and it's also the only one that has a definite date when it is supposed to be happening again March 17th we'll give you an update on that later this month all right guys that is the video for today if you like what we do please subscribe to the channel and we'll see you in the next one bye-bye