FICO Changes How It Calculates Credit Scores

This will help consumer spending in America. Fair Isaac Corp. said it will stop including in its FICO credit-score calculations any record of a consumer failing to pay a bill if the bill has been paid or settled with a collection agency. The company also will give less weight to unpaid medical bills that are with a collection agency.

This statement follows months of discussions with lenders and the Consumer Financial Protection Bureau and is intended to boost lending without creating more credit risk. Since the recession, many lenders have approved only the best borrowers, usually those with few or no blemishes on their credit report.

The changes are expected to boost consumer lending, especially among borrowers shut out of the market or charged high interest rates because of their low scores. My question is are we blowing another bubble that is bound to pop?