FICO makes no sense to me whatsoever...

[grooveman]

In the last couple of months I have had the only 2 collection accounts removed from my credit report, had 3- 30 day lates removed and my utilization on revolving debt remains under 50%. Yet my FICO score has plummeted from 653 just a few weeks ago, to 616 today.

I have increased the balance on my credit cards for some CHristmas shopping, but nowhere near the limits and haven't had any late payments in the last 2 years. I did open one new account with Amazon in the last few days however.

I just don't understand how I can drop so far so fast, especially when I had 2 collections removed. I was expecting a score increase, not a decrease.

[llecs]

Were the collections from a collection agency or were they charge-offs? Do you have other baddies remaining? How old were the 30s?

If you have other baddies remaining, the impact of removing two on your score won't be all that much, because others are reporting. It all depends on how they report and what was reporting. If they were COs, then those factor into your AAoA and length of history. If old, assuming they were COs, then there's could have been a loss in the length of history and AAoA which could offset any gains due to the baddies themselves. For the 30s, FICO largely ignores them after a couple of years. For all of this, YMMV based on your credit. Even if there's a net loss, I'd much rather be baddie-free.

I think the source of your loss could likely be due to utilization. Revolving utilization is a very large part of FICO scoring. I once went from 89% to less than 5% per util and gained over 100 points on EQ and over 70 on TU. Conversely, even going from 5% to 40% could easily result in a loss of 30-50+. Again, YMMV based on your credit.

Opening new accounts can hurt too. I just lost 18 according to ScoreWatch due to adding a new account just this week.

[grooveman]

The two accounts were from a collection agency, both around 5 years old. The last 30 day late I have is from April 2010.

Aside from a few 30 day lates from about 2 years ago, I have an old HSBC charge off from 2006. 

My util has gone up quite a bit in the last couple months so that probably has a lot to do with it. Hopefully paying the revolving accounts down after xmas will help bring the score back up. I just thought having those collections removed would have more of a positive impact. I had no idea that just opening a new account would hurt that much either.

[cashnocredit]

Removing CAs has a positive affect but it is very little until you get down to 2. Going from 2 to 1 will give a bigger bump and going from 1 to 0 is the biggest.

So yep, given that you still have CAs your change in util will dominate.

[RobertEG]

+1

It appears that your score is the result of what those on the site call "bucketing."  Before your score is calculated, FICO does a review of certain factors in your file, and determines which of its algorithms will be used.  You are in what is conventionally called a "dirty scoring bucket," meaining you have at least one major derog in your file.  When that is the case, the category and items are shifted in some unknown fashion to skew the scoring.  Since FICO has already viewed your payment history as negative, changes are it is placing increased scrutiny on your utilization.

Getting the file "clean" of major derogs will be a huge step.

[pizzadude]

Also check the "Whats hurting your FICO score" and "Whats helping your FICO score" reasons on your score report.   These are very helpful and will point you to any specific items that need to be addressed.

[cashnocredit]

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@pizzadude wrote:

Also check the "Whats hurting your FICO score" and "Whats helping your FICO score" reasons on your score report.   These are very helpful and will point you to any specific items that need to be addressed.

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They sure are! Also, the list of what hurts is in order of impact. The first item counts more than the second and so on.  Very useful.