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Hello,
I have recently applied for a mortgage loan and the broker was trying to get my mid score (EFX) to a 700, I didnt have too much available revolving credit (maybe around 10-15%)but at their suggestion I paid off numerous tradelines and now my available revolving credit is at 77%. The scores however, have dropped. I have also had two lates towards the end of 2008, no collections, one mortgage and have consolidated an old mortgage (loan was with ABN AMRO, but they went out of business and sold the loan to Citibank, both were previously reported and now the ABN Amro tradeline has been closed). I find it odd that the scores have dropped when I paid these balances off, the score factors have changed but still list "Proportions of high balance to credit limit" and "Amount owed on Revolving accounts is too high" even though the balances have all been paid down on all of my active tradelines. Can someone please provide me with some insight, and perhaps why this happened? I am confused at this point.
Thank you in advance for your time.
Welcome to the forum! There are really only two possible answers to your question (at least I can only come up wiht two).
The first is the most common question on here: Did your scores come from this site? That is are they real FICO scores?
The second question is what has changed on your credit reports. Your Fico score will not decrease with a decrease in utilization so something else has changed (provided that we are actually talking about Fico scores here).
I would look up GW (good will) letters on here and see if you can get the lates removed.
Good luck
Hello Colbaltnv,
Thank you for your reply and insight. They are indeed real Fico scores, Beacon 5.0 from EFX, Fico-II from XPN and Classic 98 from TUC. These are mortgage rated scores. As far as what has changed is that the balances have been paid down, a duplicate mortgage has been removed and the score factors have changed around but makes less sense now than they did before. I am just terribly confused as to why paying down balances would lower my score, I spent almost $10k to pay down balances to try to raise my midscore up 8 points to lock in a lower rate, however that was not what happened.
My guess is that the lates were not reporting before and the duplicate mortgage also helped with scores. Now that it is removed, it has decreased your scores.
Definitely do a comparison with each report and try to recognize the difference. Also are all balances updated with the cra.
Definitely check to see if your reports are reporting the updated balances.
I would like to add that time heals credit wounds. With each passing month, everything else being the same, your scores will slowly rebound from a late payment event. Once you are passed the 12 month anniversary, the score jumps a little more. If your late was in 3/08, a report pulled in 4/09 would yield the best score. Also, the DLA (date of last activity) field is key for determining if the account is reviewed. Activity in the last twelve months has the most impact. The more recent the information, the more relevant it is, and therefore affects your score the most.
Good luck! It was worth a shot! Lenders have a tendency to pull credit before closing, so if your report is cleaner and doesn't show new debt, that's good. Sometimes, the loan originator can ask and receive a rate exception. If rates have dropped since your loan was started you might ask for a better rate (.125 lower?)