Which scenario should yield a better score

[Anonymous]

I am in the end portions of amajor credit re-build and I have a question about scoring. As my financial picture has improved, my credit score keeps dropping. Between paying off  a mortgage (40 points) and a Collection account aging off my credit file (60 points) I have lost 100 points in the past year.  I can see where FICO/FAKO may have a problem with me paying off my mortgage - if you don't have debt how can they score you? Some of the forum gurus have posited that the aging off of the collection account may have reduced my AAoA which FICO/FAKO doesn't like either.

If that is the case, I will have a major aging off of accounts in the next 4 months - up to six collection accounts, leaving one which I am trying to settle with. That would leave me with a single secured credit card and a $200 limit which never has a balance greater than a tank of gas and a car loan that is 1 year old with 2 more to go. Both are less than 1 year old.

Which credit file would yield the higher score:

File A: 6 major derogatory TLs average age 10-14 years, all out of Statute plus two recent TLs with no missed payment, or

File B: Just the two recent TL's.

My scores right now are in the high 500's.

[Anonymous]

No question that B (no derogs of any kind) would be much better, especially given that the two accounts you envision in B are a credit card and an open installment loan (that is partly paid off).  That's a nice credit mix.

Incidentally, as you move ahead, feel free to use the credit card as much as you want.  Just be sure you pay it down to $5 a few days before statement prints.  After everything has dropped off and your scores become much higher, you might want to add a second card and then eventually a third.  When the car loan is almost paid off, you'll want to add use the SS Loan technique, so that you don't lose any points.