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AznP33nRocket
Posts: 1
Registered: ‎11-29-2012
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1 unknown bill to collections, extreme credit score drop? <$500 Need Help!!

I recently went to get a Credit Card at a home improvement store and was denied. I waited a few days to get a letter in the mail to explain why and it stated my score was too low. I'm fairly young, but have worked very hard to get my score up. I recently bought a brand new car aprox 5 months ago, and during that time, my score was averaged at 620. The Letter i received said my Score was at an all time low of 341!!! After reviewing the 3 credit agencies, I found on 2 groups, TransUnion and Experian, both had the same item in collections. It was an overdrawn account with a bank I had about 6-7 years ago. I dont recall this problem, but it was only for $371 so i'm not wanting to argue with the bank or fight it, I will just pay it. I read on this forum to request a Pay for Deletion. I plan on doing so, but my question is this. How can such a small collections that has only been bought by this collections agency 2 months ago, lower my score THAT much. Nothing else is negative on my account, and other than that, I have nothing but a good standing account history! At the moment, i have 2 loans out in my name for 2 cars that have a grand total of $28k remaining to pay off. Never missed a car payment or anything, and paying them off fairly fast. My wife has the home loan in her name, but it shouldn't affect me, cause that loan doesn't even show up on my credit history.

 

If they remove this collections debt from my credit report as if it never was there, will my score immediately jump up? Is it low because I have 2 loans out, and my wife has 2 loans out? The total I owe on my 2 loans equal about 1/3 of what I make a year, if that has anything to do with this issue. I need some help with this issue ASAP! Hope someone can show me some light at the end of the tunnel. I'm needing to fix up my house and need this loan to prevent additional damages!

Established Contributor
bahbahd
Posts: 731
Registered: ‎08-12-2011
0

Re: 1 unknown bill to collections, extreme credit score drop? <$500 Need Help!!

[ Edited ]

The recent CA account has simply tanked your scores. Since this is originally from a bank, I would contact the bank to see if there was any error and if you did let an account go negative after the account was closed, etc. I would also ask the bank if they report to ChexSystems or any other reporting agency.

 

Did you receive a dunning notice from the CA? I would send a DV letter immediately to the CA. You could always skip this and just try a PFD with the CA, but the DV might be a chance to just have the CA delete the accounts from the CRAs.

 

Yes, you score will return to around to what it was if you can get the CA account removed. It would be very good to find out from the OC that you did not have an account balance that went unpaid. 

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Shogun
Posts: 12,952
Registered: ‎04-15-2011
0

Re: 1 unknown bill to collections, extreme credit score drop? <$500 Need Help!!

Also, that score sounds like an internal score, not a FICO.  You would have to look at the range of scores to determine, by that would be my bet.


Starting Score: 504

July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+

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Valued Contributor
GregB
Posts: 1,670
Registered: ‎05-24-2007
0

Re: 1 unknown bill to collections, extreme credit score drop? <$500 Need Help!!

I agree with Shogun. I would guess it is not a Classic FICO as you would have to work at getting a score that bad.

Valued Contributor
rckstrscott
Posts: 2,660
Registered: ‎04-25-2011
0

Re: 1 unknown bill to collections, extreme credit score drop? <$500 Need Help!!


AznP33nRocket wrote:

I recently went to get a Credit Card at a home improvement store and was denied. I waited a few days to get a letter in the mail to explain why and it stated my score was too low. I'm fairly young, but have worked very hard to get my score up. I recently bought a brand new car aprox 5 months ago, and during that time, my score was averaged at 620. The Letter i received said my Score was at an all time low of 341!!! After reviewing the 3 credit agencies, I found on 2 groups, TransUnion and Experian, both had the same item in collections. It was an overdrawn account with a bank I had about 6-7 years ago. I dont recall this problem, but it was only for $371 so i'm not wanting to argue with the bank or fight it, I will just pay it. I read on this forum to request a Pay for Deletion. I plan on doing so, but my question is this. How can such a small collections that has only been bought by this collections agency 2 months ago, lower my score THAT much. Nothing else is negative on my account, and other than that, I have nothing but a good standing account history! At the moment, i have 2 loans out in my name for 2 cars that have a grand total of $28k remaining to pay off. Never missed a car payment or anything, and paying them off fairly fast. My wife has the home loan in her name, but it shouldn't affect me, cause that loan doesn't even show up on my credit history.

 

If they remove this collections debt from my credit report as if it never was there, will my score immediately jump up? Is it low because I have 2 loans out, and my wife has 2 loans out? The total I owe on my 2 loans equal about 1/3 of what I make a year, if that has anything to do with this issue. I need some help with this issue ASAP! Hope someone can show me some light at the end of the tunnel. I'm needing to fix up my house and need this loan to prevent additional damages!


Definitely an internal score of some sort... FICO only goes down to what, 300? I have never seen a score under 400 personally. I would venture your FICO scores at the worst, if thats the only negative on your file, with no other lates would be more like,  560-60...

 

The reason a new deliquency impacts scores so much is FICO scoring is predictor of on time payments over the next 24 months. When you have a recent new delinquent account, it shows a recent dip in your ability to pay bills on time, and in turn, a lower score...

 

-scott

 

 

 

-scott

Starting FICO Score: 10/10: TU 498 | EQ: 502 Current FICO Score(lender pull): 09/14: TU: 784 | EQ: 752 | EX: 784
Collections Removed: Hunter Warfield, CBE Group, Merchants Credit Guide, EOS-CCA, Enhanced Recovery, Portfolio Recovery, UCB, American Collection Company, Medical Business Bureau, Jefferson Capital, Credit Portfolio Associates, FCO, LVNV, Convergent, Armor Systems
Other Negative Entries Removed:Plains Commerce CO, HSBC CO, 2008 Judgment Santander Reposession


Positive Accounts:10/10: 0 | 07/12: 6 | Mortgage Closed 5/12, Macy's AMEX $13900, Citi/Home Depot $8500, Capital One Cash Rewards $3500, BOA $7500 Total Utilization: 3%. AAoA: 2yr, 9mth. INQS: 1 TU, 1 EQ, 3 EX

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