My Scores have been declining

[Anonymous]

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SkiloverLA wrote:
Thanks, guys.
OK, I haven't pulled my score on MYFico lately, and am not going to pay for it now, as I know my score, but whenever I see the reasons given for adverse actions from the credit bureaus they are as follows:
-Prior Collection/lates/adverse action
-Current collection/lates/adverse action (this is a lie)
-Too many inquiries
-Too many new accounts
-Too much utilization

To be honest, in the past when I've played with the simulator, the only thing that really helped me was time. Paying down cards helped only marginally.

Of all of these items, the only one I can address is the last. ...

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Actually if those reasons appear in the order listed, they list in order of importance.

You can  do quite a bit about the first two reasons. Make sure your reports are accurate. Then start working on the CAs/COs/lates. You can DV/PFD/GW. Some are surprisingly easy to work with.

This assumes some of the accounts showing derogs were not IIB. If they are IIB, perhaps some of them are being coded/reported incorrectly?

[Anonymous]

Gordon--actually, this was in context of the posts that went before. ALL of these lates, collections,etc. are part of my BK. There is in fact NOTHING I can do about these, at least nothing legal. I have cleaned up my report to the best of my ability, and truthfully, it is pretty accurate. That is why I say their comment about "current lates/collections is a lie--there are none on the report, but they say it anyhow. Post BK, there are exactly two negatives in 3 years. One is HSBC, one of those dinky cards where I was 2 days past 30 on a $6 payment, and despite all my many efforts, they simply refuse to relent and remove this negative. The other is a paid medical collection where first we had an insurance dispute, then I moved and it didn't catch up with me until it was reported, which is how I ever even found out about it. I then tried to negotiate to pay it if they would remove the collection, and they refused. I was new to credit back then, and perhaps today would have been more persistent. I subsequently went to war on another similar medical issue (same cause) where they filed the report prior to making any effort whatsoever to contact me, and after I involved the BBB, I was in fact able to pay in return for getting it removed. Therefore, since I have tried on both these issues many times, I think the two items are on my report for the duration. However, realistically, were it not for the BK, no one would ever notice or care about these two minor issues over a three year period. These items are not "current" either--they are at least two years old. It is the BK that makes both FICO and everyone else hyper sensitive. That is my opinion, anyhow.

I have no idea what a "IIB" account is. If you are right that order is important, this supports why findings from the MYFICO simulator--paying off my credit cards will not materially improve my score. It must be a combination of the prior BK, and all the inquiries/new accounts. At this point, to me, the whole thing feels Kafkaesque. Basically, regardless of what actions I take, I will have a **bleep**ty score.

My only other thought, is someone told me FICO compares the number of good accounts to the number of bad ones. My BK took down a LOT of accounts, way more than I have good accounts now. Based upon that, one of my strategies actually was to obtain as many card accounts as I could, and keep them all current, in the hopes of overwhelming the bad with good. This seems to have backfired on me. Back to the feeling that this is simply Kafkaesque, and out of my control.

[Anonymous]

From what I've read here, there seem to be a number of people that have done a BK only to find that many accounts that were to be Included In Bankruptcy are actually showing on their reports outside of BK. That's what I was referring to.

I don't have a BK so not sure how these show or don't show on CR. You might try to the BK forum. If you have accounts that are obviously derog, but not coded correctly to show IIB they will be additional derogs to the two you are fighting.

BTW even though you've paid it, you may have some luck with the HIPAA steps on the medical collection. Check the stickies.

[Anonymous]

Gordon, you are right, there were a number of derogs that originally did not show "discharged in Bankruptcy". However, I have indeed fixed all of those; some were, absurdly, quite a battle! That is furthering my confusion as to why my score actually has gone down, as you'd think that would help. It did help with individual underwriters, however.

I don't mean to sound like a moron-What are "stickies" as you used the term pertaining to this board? If I have any basis to challenge the medical collection derog, I'd love to try. The agency refuses to be cooperative. Problem is, so far as I can tell, a paid collection is only marginally better than an unpaid one as far as FICO is concerned. They both are collections; almost makes you wonder if you ever should bother to pay them if they won't remove the derog altogether.

Finally, what are these IIB things you keep referencing?

Kindly,

[Anonymous]

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SkiloverLA wrote:
Gordon, you are right, there were a number of derogs that originally did not show "discharged in Bankruptcy". However, I have indeed fixed all of those; some were, absurdly, quite a battle! That is furthering my confusion as to why my score actually has gone down, as you'd think that would help. It did help with individual underwriters, however.

I don't mean to sound like a moron-What are "stickies" as you used the term pertaining to this board? If I have any basis to challenge the medical collection derog, I'd love to try. The agency refuses to be cooperative. Problem is, so far as I can tell, a paid collection is only marginally better than an unpaid one as far as FICO is concerned. They both are collections; almost makes you wonder if you ever should bother to pay them if they won't remove the derog altogether.

Finally, what are these IIB things you keep referencing?

Kindly,

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Sorry, I tried to use the capitalization to show:

IIB=Included In Bankruptcy

So every single one of your BK accounts shows a $0 balance and reports as included in BK?

Stickies are the posts that are permanently stickied at the top of the forum, quite a few of the mods put the links in their signatures too.

As far as FICO goes, CA/CO paid or not doesn't matter. PFD or GW (or HIPAA for medical collections) is about all you can do at that point.

[Anonymous]

I finally found the HIPPA letter you referenced. That is brilliant!! Since the original medical provider is a very large organization, I think they would be sensitive to a HIPPA threat. I will use that letter and see if I can get this thing removed. Thank you! I hadn't realized that once a collection agency is hired or sold the debt, that the original provider of the services could pull them back. But, maybe they can threaten them with future business if they won't cooperate. I guess there's always something.

That would get me down to one one bad in three years after BK--everyone is allowed one, right? I've tried everything on HSBC, and they are intractable! This is all over a $6 payment 3 days after 30--how absurd! And, in reality, how meaningless, but FICO doesn't distinguish between that and $100MM being 29 days past 30.

The problem isn't FICO. It is that credit underwriters today are too lazy to do anything but simply rely 100% on FICO. It's a tool, it was never intended to replace underwriting.

Thanks for your help!

[Anonymous]

Hi Again.  I just listen to as Webinar titled "Signs of looming credit problems", which featured some information that may interest you.  It covers inquires and utilization among other things.  The speaker stated, as someone said above, that multiple car loan inquires within a 30 day period are counted as just one inquire.  So if more than one auto loan inquiry is being factored into your score, it may have been outside the 30 day period.

I also learned that a single inquiry can lower your score up to 5 points.  So even with just one inquiry hit for the car, you still had 6 other inquires for a total of a 35 point reduction.  It may be worthwhile to call to the credit reporting agency to see how the inquiries were calculated and how much they effected your report.

The Webinar speaker also said if a credit card is closed and has no balance, it is not calculated in your FICO score. If that same card has a balance, it will be calculated into your FICO score. However, if that same card is open, it will be calculated into your FICO score whether or not there is a balance.  That's why if you close a card you must make sure it has a zero balance and before you do, calculate whether you need the limit to help your utilization rate.

I don't mean to take pleasure in your pain but, your issue has turned out to be a real eye opener for me. As much as I thought I knew from my own experiences and even with helping other people, there is still a lot of new information for me to learn which I'm learning from forum questions like yours.

[Anonymous]

Fascinating about the impact of mere inquiries on score. If they truly are 5 points each, that in and of itself accounts for the entire decline in my score. Do you know for how long FICO counts these inquiries? Also, do they count the routine inquiries credit providers run on their existing accounts? That alone could be quite a few a year for me, outside of my control. Also interesting about cards, and closing them. I am not going to close any more, based upon the discussions in this thread. I'm not sure if I sent one, or two requests to close lines so far. The lines were small with no balances, other than their stupid monthly fee, so it won't impact my utilization. However, it will impact my average age, as these were relatively old accounts (i.e. 2.5 years!). It sounds like the best thing for me to do right now is just lie low, not use the cards more than needed, or pre-pay them to keep the reported balances low, and hope for the best.

I think with the current credit crisis, lenders are being more conservative, and are leaning more heavily on FICO scores, especially when they favor adverse action. I think lenders may be looking for a way to reduce their credit exposure at this point. My loss of $2K in credit lines due to a lenders re-evaluation of my account in view of my lower FICO has cost me availability, as my total available credit now is lower. If that happens a few more times, I'm really screwed, as I won't be able to replace those cards, and I'll end up back how it was immediately post BK. That simply would be insane, given a virtually perfect payment history, especially with all these stupid small limit cards to keep track of.

This is educational, but I'd rather not have to be so dependent upon this.

Thanks. I'm still going to do the HIPPA letter.

[haulingthescoreup]

As sidewinder explained, inqs for an auto loan within a limited time frame will display, but they are "de-duped" for scoring. You are NOT losing 5 points X 6 auto loan inqs; you're just losing one inq's worth.

Hard inqs count for one year (except when de-duped as above), and display for another year. Soft inqs, done by creditors on existing accounts, do not count at all.

As to the link sidewinder mentioned, it's in his siggy, as he said. Here it is again:

Medical Collections(Thanks HappyDays)

High util --and 35% is high --can be a significant factor in score drops!

Please read AT LEAST the first post on Credit Scoring 101, linked below in my siggy, and also click above on the Credit Education tab by myFICO. I understand that you are trying to find out specific info about your specific situation, but none of it will make sense until you get a better feel for the big picture, and you can even wind up doing some damage unless you understand how this stuff fits together. Filling in a lot of the gaps should help. Good luck!

[Anonymous]

Hauling...I appreciate the clarification on how multiple credit pulls for a single car loan are counted, and about "soft" pulls.

I am well aware of the basics you referred to in your message--your implication perhaps not intended is I should know the basics before posting, which I actually do. Prior to the BK, I've had a score of 700 with higher utilization than 35%, for example, so everything is relative. I think with so many accounts in my BK, my score is very delicate, and everything is being exaggerated that can be construed as a negative by FICO.

FICO is not a perfect tool, as there is no such thing as a perfect tool, and it is penalizing me harshly for high utilization of a very small amount of credit, which is all I am able to obtain due to FICO, which is responding to my prior BK. This amount of credit relative to income, which FICO does not use (or know) makes this amount of use a false predictor that I'm in trouble and going down the drain. The effect is circular--I can't get more credit due to FICO, and FICO penalizes me for using what little I have. I think this entire thread provides clarification of the general gist of my catch-22.

My purpose in posting here was to see what feedback I could get on my situation, and it has been very helpful, both to me, and others. Further, I had located the HIPPA letters, and think that approach is brilliant, I wouldn't have thought of it in a million years. Thank you, however, for including the link for me.

Further in this thread, I was given the clever suggestion that by paying cards before the bill, I can lower the appearance of usage. That was helpful to me, and perhaps others.

In this era, one needs available credit to get through day to day life, especially if one travels on business and entertains. It was necessary for me to do what I could to obtain some, although FICO clearly is penalizing me for doing this. However, had I not gotten credit, I'd be penalized for any and all usage as the amount of available credit would be so small. Back to the Catch-22.

Message Edited by SkiloverLA on 08-11-2008 05:35 PM