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Valued Member
kleahc
Posts: 48
Registered: ‎01-08-2014
0

Question about weighting different types of "baddies"

[ Edited ]

If this has been asked before, please forgive, I wasn't able to find it. (Well, I asked it in another forum, but got no answers!)

 

OK, the history... after a couple of years of medical issues and an ongoing battle with the insurance company, I was left with awful credit. Like, 500 scores all around. I spent two years rebuilding it all, and was at 670-mid score on FreeCreditReport.com

 

All of a sudden (I guess because they buy the credit alerts) three collections pop on my report from 2011, 2011, and 2008. I paid off the 2011 ones immediately, but the collection agency won't delete them unless I also pay off the 2008 one which I can't afford to do. So now my FreeCreditReport.com score is a mid-590.

 

Two questions:

 

1. When I pull my score here on MyFico, I have a mid-615. I realize they all use different scoring systems, but I wonder, is medical debt weighted differently than credit card debt? Or is there another reason why this is so different from the FreeCreditReport one?

 

2. I have zero baddies outside of the medical debts, and all of those were deleted except for the 2 paid, and one unpaid from 2008. I have great payment history on my 3 credit cards (they are all about 2 1/2- 3 years old) and have finished paying off the one auto loan I had, and was never late. I have no other loans, no bankruptcies, no late payments outside of the medical bill. How in the world can I get my scores up?? It seems like they are really low for having only the few baddies on there, and the one unpaid being so old. (When I put all of my information into the Score Estimator, it said I should have scores ranging from 609-740... what am I doing wrong? Really need to get these scores up!)

 

Thanks for any help understanding, and for ANY help in how to raise these scores!!!

Moderator
Revelate
Posts: 9,738
Registered: ‎12-30-2011
0

Re: Question about weighting different types of "baddies"

[ Edited ]

Freecreditreport.com's score is not comparable to any of FICO's algorithms.  Any confluence is coincidence unfortunately.  Which score was explicitly the 615 and what were the other two?  The three are all slightly different currently, and they do have different weightings for things anecdotally.

 

As for the derogatories / baddies, different types are counted differently against you.  Revolving utilization on credit cards, is different than late payments on a credit card are different than any sort of collections including medical ones, which are in turn different from judgements, tax liens, and BK's though these latter 3 might all count similarly on the scorecard: hard for us to know for certain.

 

The easiest path for improving your FICO score: when you can afford to pay that other collection, if they'll delete, absolutely take that offer; without those debts assuming your credit card debt isn't substantial you're 720ish easy.

 

Speaking of which, do you have any credit card debt reported on your sheet?  If you do, that may be hurting you both in terms of aggregate utilization and in number of tradelines reporting a balance.

 

Beyond that the only thing it sounds like you're missing is installment history: after you get the collections taken care of, I'd recommend seeing about getting a secured installment loan vis a vis "Credit Builder" loan (see DCU for an example of that, or you can secure a loan against a CD or similar from any number of lenders) but realistically the most important thing you can do is get the medical collections taken care of.

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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Valued Member
kleahc
Posts: 48
Registered: ‎01-08-2014
0

Re: Question about weighting different types of "baddies"

Thank you for responding!

 

The mid-615 here at MyFico was the Equifax (I also pulled Experian here, which was a 639. Ididn't pull Transunion because the one collection agency that has my debt does not report to them, and so that score has remined in the 680 range this whole time)

 

My credit card debt (3 cards) is kept well under 10%, but I use each one once per month to keep the balances current (this is from the loan officer working with me on the possibility of a motgage application in the future)

 

On the installment loan,  yeah, I did have the car loan, but paid it off early, so that is not longer open.

 

Thank you so much for your help! I keep reading these boards and trying to educate myself. This is a really confusing topic!!

Mega Contributor
RobertEG
Posts: 18,477
Registered: ‎03-19-2007
0

Re: Question about weighting different types of "baddies"

Yes, prior derogs are weighted differently.

There is a distinciton between major an minor derogs.

 

If you have a major derog, such as a 90+ lale, a collection, or a charge-off, FICO scores the payment history category differently.

They use a preliminary review of all payment history reporting to place scoring in a specific category, or "buvket," and use different weightings when a major derog is present.

 

You generally wont see huge improvment in payment history scoring when one derog is deleted or excluded, and other major derogs still remain.

Once all major derogs are gone, then you move into a more favorable categorization, or "bucket," which normally produces more significant score increases.

 

Payment history is the most heavily weighted scoring category.  While improvements in util will certainly help, they generally dont provide the same bang as removal of major derogs.  However, utlil is the one category over which you have immediate control by reducing util, so it is normally the short term category that is addressed.

Moderator
Revelate
Posts: 9,738
Registered: ‎12-30-2011
0

Re: Question about weighting different types of "baddies"


kleahc wrote:

Thank you for responding!

 

The mid-615 here at MyFico was the Equifax (I also pulled Experian here, which was a 639. Ididn't pull Transunion because the one collection agency that has my debt does not report to them, and so that score has remined in the 680 range this whole time)

 

My credit card debt (3 cards) is kept well under 10%, but I use each one once per month to keep the balances current (this is from the loan officer working with me on the possibility of a motgage application in the future)

 

On the installment loan,  yeah, I did have the car loan, but paid it off early, so that is not longer open.

 

Thank you so much for your help! I keep reading these boards and trying to educate myself. This is a really confusing topic!!


Late reply, was out of town for several days.

 

Your LO isn't doing you right: of those 3 cards, pay two of them off completely, the other you want reporting a balance but a small one, between a few bucks and call it <9% of your credit limit on that card.

 

That is an easily addressible thing on your credit report.  Generally it's accomplished by simply paying before the due date: still use the cards to keep them active, but simply change your payment schedule a bit.  This is typically close to optimal for most people from a FICO scoring perspective, and absolutely should be done pre-mortgage qualification.  

 

If you have an installment loan already on the report, ignore what I suggested getting another one: you've already hit the major portion (having any installment history on your report) and you're talking a few points extra potentially with an open one reporting: if you're in the run up to a mortgage (less than a year) don't open a new account unless you have to.

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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Valued Member
kleahc
Posts: 48
Registered: ‎01-08-2014
0

Re: Question about weighting different types of "baddies"

Thank you so much! Advice heard and taken.


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