collection removed and SCORE GOES DOWN????

[Anonymous]

I am at the end of my rope with this FICO system.  Jan 8 my Experian score was a 647.  Yesterday I sucessfully had an invalid collection removed and my score went DOWN 8 f*#$ing points?!?!?

All of my payments have been made and I went from a 25% revolving debt usage to 0% utilization.  How in the world can FICO punish me for getting an invalid collection deleted and paying down my CC??

Nothing and I mean NOTHING else in my report has changed!  No late payments, no new inquires or accounts!!!

[Anonymous]

How old was the collection?  It may have been helping the age of your credit history.

[Anonymous]

Collection was from 2005.  I don't buy that FICO would make having an old collection worth more than the amount of time it's been there!

[Anonymous]

0% utilization is not a positive factor for Fico scoring - I hear that 5%-10% is weighted more favorably

Account history weight depends on your overall account history lenght - if you have all recent account (5 years is still recent), losing even one is weighted negatively.

[Anonymous]

Collections that are properly reporting as a collection in the collection sections of your CR are NOT counted in your age of accounts.

Collections that are misreported as a  regular TL may be counted in your age.

As mentioned, 0% util is not a positive thing. The reason is because FICO scores how well you manage your credit. To the FICO scoring model, if you aren't using it, you aren't managing it. Letting just 1% report should increase your score.

If the collection being removed and the util going to 0% were your only changes, I'd say it is the util that caused the 8 point decrease.

Also, if this was your only collection, it is possible that you were re-bucketed, which could have caused a score change but is actually a good thing.

Also, I just want to double check that these are actual FICO scores gotten from this website that you are looking at?

[Anonymous]

Yes, both scores were purchased from myfico.com.  (I used the new promo code!)  I have one other collection that I am working on so it was not my only collection.  Also the collection was being reported under the collection section of my credit reports. 

[Anonymous]

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JMW331 wrote:
Yes, both scores were purchased from myfico.com.  (I used the new promo code!)  I have one other collection that I am working on so it was not my only collection.  Also the collection was being reported under the collection section of my credit reports. 

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Ok, then I think it is fairly safe to say the score drop didn't come from rebucketing or losing age.

I would say that it came from having 0% util reported. Let as little as 1% report and see what happens.

[ScoreBooster]

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@Anonymous wrote:

Account history weight depends on your overall account history lenght - if you have all recent account (5 years is still recent), losing even one is weighted negatively.

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demed,

Doesn't it depend on WHICH one of his accounts he might lose? I was under the impression that the average age of accounts was a factor for FICO.

Let's say I have 4 accounts that are 5 years old and one that is only a few months old.

Shouldn't my average age of accounts increase if I get rid of the "youngest" one?

Unless this "young" account was the first account established (which could be the case if it was closed), I don't see a reason why a removal would do any harm in regards to history or length. A removal would neither "shorten" the total length of credit on file nor the average age of accounts.

[Anonymous]

If you have 4 accounts exactly 5 years old and no other accounts. Then your length of history would be 5 years and your AAoA would be 5 years.  4*5=20/4=5

If you lose one of those accounts, your length of history would still be 5 years and your AAoA would still be 5 years. 3*5=15/3=5

However, not many have accounts that are all the same age. If you have 4 accounts that are 5 years old and 2 accounts that are 2 year old, your length of history would be 5 years and your AAoA would be 4 years old.

(4*5) + (2*2) = 24/6 = 4

Remove one of the 5 year old accounts and your length would still be 5 years, but your AAoA would be be 3.8 years.   (3*5) + (2*2) = 19/5 = 3.8

So, really it just depends on how old each account  on your report is and which account gets removed.

Again though, collections properly report are not counted in age.

[ScoreBooster]

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@Anonymous wrote:

However, not many have accounts that are all the same age. If you have 4 accounts that are 5 years old and 2 accounts that are 2 year old, your length of history would be 5 years and your AAoA would be 4 years old.

(4*5) + (2*2) = 24/6 = 4

Remove one of the 5 year old accounts and your length would still be 5 years, but your AAoA would be be 3.8 years.   (3*5) + (2*2) = 19/5 = 3.8

So, really it just depends on how old each account  on your report is and which account gets removed.

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Thanks, sidewinder!

Using your second example, the AAoA would increase if one of the 2 year old accounts would be removed.

(4*5) + (1*2) = 22/5 = 4.4

So AAoA-wise, you can actually be BETTER off by losing an account - it just depends on which.

That's exactly what I thought...

Message Edited by ScoreBooster on 01-20-2009 03:27 PM

Message Edited by ScoreBooster on 01-20-2009 03:28 PM