Score dropped after payoff. Need advice to rebuild

[Anonymous]

1 collection account was deleted by Experian but I havent got an alert of a change here yet. I saw it on  the dispute summary page.

[Anonymous]

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@Anonymous wrote:

1 collection account was deleted by Experian but I havent got an alert of a change here yet. I saw it on  the dispute summary page.

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An account deletion is not a trigger event.

[Anonymous]

4 collection  accounts  updated as paid and the score dropped 1 point each.. Why wouldnt the increase instead of decrease?

[Revelate]

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@Anonymous wrote:

4 collection  accounts  updated as paid and the score dropped 1 point each.. Why wouldnt the increase instead of decrease?

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Paying a collection unfortunately isn't a positive on FICO 8 and below, and can be a negative depending how the tradeline updates.  Deletion >> Paid unfortunately.

That's "fixed" in FICO 9, but it's going to be a while before that is used extensively.  On the plus side, if I couldn't delete them, paying 4 collections and only losing 4 points (maybe, hard to say with how the monitoring solutions work) is a bargain: having them paid is critical for some UW hurdles, and getting an anything underwritten is about more than just one's FICO score, the report data matters and there Paid >> Unpaid.

[Anonymous]

well its screws us no matter what cause it had to go up cause we were trying to getting a house loan and we were so close. I figured 4 accounts would gets us over the hump  

[Revelate]

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@Anonymous wrote:

well its screws us no matter what cause it had to go up cause we were trying to getting a house loan and we were so close. I figured 4 accounts would gets us over the hump  

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Your LO might've told you you had to have them paid anyway, though usually they can do that as a condition of closing post score pull partly for this reason as I understand it.

What I'd suggest is posting your revolving utilization, and if you're up to it, your installment loans as well in terms of current / original balance (or balance / limit in the CC world) and maybe there are some quick tweaks we can suggest to boost your score a few points.  I assume your score is the low one of the two?  How far away from qualification are you and what score do you have to hit for your specific loan product?

Did the CA's refuse the PFD offers I assume you made and as such payment was the only option?

Would hurt to know the secondary's credit cards either, maybe there's a useful AU to tack on the strategize the report a little more.  

Guess what I'm trying to say is doing throw in the towel just yet, may still be options to get your score up enough to clear the hurdle.

[Anonymous]

We are only using my husbands credit so right now we've paid  all his collection accounts off and all the credit card off (thinking that was a good thing-found out after it was bad 20 point drop after 0 balance) still have open loan for a car. just paid off the other car.  we used one of the credit cards (he only has 2) now so going to keep a low balance on it to help rebuild.What other info do you need? all the info has been for him tho 

[RobertEG]

My understanding of the scoring effect of a update in status........

When you pay an account, the creditor or debt collector must update their reporting to reflect the new balance of $0 and the new, non-delinquency status of paid.

However, that update also informs the algorithm that the account has contined to remain in a delinquency status since the last reporting, and up to the date of payment.

That effectively updated the scoring of the derog on the account, as it was picked up as a continued and now longer derog.

Why penalize for longer period of derog status?  Because the creditor did not have the money to invest elsewhere, and thus their loss deepened.

However, the good news is that, once paid, the account can no longer be updated to thereafter extend the period of the derog, and it thus begins ot age down in effect as the period from the derog lengthens.

[Revelate]

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@Anonymous wrote:

We are only using my husbands credit so right now we've paid  all his collection accounts off and all the credit card off (thinking that was a good thing-found out after it was bad 20 point drop after 0 balance) still have open loan for a car. just paid off the other car.  we used one of the credit cards (he only has 2) now so going to keep a low balance on it to help rebuild.What other info do you need? all the info has been for him tho 

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Well you've pretty much done all you can in the short term.  When he gets his 20 points back is that enough to hit the required mortgage threshold?

If you have more time there are some further tweaks you could do, but let the chips land for the actions you've taken and then see where you're at for your mortgage trifecta and make the decision on the path forward from there.

[Anonymous]

we were about 38 points off so adding back the 20 we would still be short but were hoping the 4 accounts would of made up the difference. even the loan officer thought paying everything off we were going to hit what we needed. Not giving up hope yet. Tomorrows a new day right?