Understanding FICO® Scoring

[knightlynews]

I received an email alert from my fico score watch today teling me there was a change to my credit report. I was happy to see that it was good news, a recent collection debt that I had settled and paid, its staus was updated. The status change resulted in a 4 point increase taking my EQ score to 563. Although this is a small positve step, I thought the increase would have been a little higher. Does the fact that I paid a settled amount instead of Paid in full make much of a difference? Also, if I write a GW letter to the CA for removal, will there be an additional increase? Thanks for any and all reponses!!!

[dodgerslv]

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knightlynews wrote:

I received an email alert from my fico score watch today teling me there was a change to my credit report. I was happy to see that it was good news, a recent collection debt that I had settled and paid, its staus was updated. The status change resulted in a 4 point increase taking my EQ score to 563. Although this is a small positve step, I thought the increase would have been a little higher. Does the fact that I paid a settled amount instead of Paid in full make much of a difference? Also, if I write a GW letter to the CA for removal, will there be an additional increase? Thanks for any and all reponses!!!

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There was just a slight increase in score because the collection was paid so it factors in your debt utilization but it is still rated as a collection unfortunately. Now like you said if you send a GW letter and get it removed the deragotory mark is removed and you will most likely see a pretty nice jump in score. But remember even if you dont get it removed, under a manual review a paid collection is much better than an unpaid one.

[knightlynews]

You said, a slight increase due to my credit utilization? Please explain. If you mean my debt to income ratio, I make 75K, my total debt is $4,500, I just don't have much new credit ( Cap1 secured-$200) hence the low fico score (563).

[knightlynews]

Still kinda new to understanding utilization!