04-18-2013 07:40 AM
I had a credit score of 633. In an effort to get to a 640 to obtain an FHA, I paid off 2 collections on my report. One of those collections was immediately taken on the report, so they said "as a courtesy", the other has stayed on but I received a letter from them in writing that the account is now "closed". So why did my score go down 10 points?!!! I am trying SO HARD to repair my score but I'm about to give up at this point and keep renting which is something that I don't want to do forever. Could anyone please help and tell me why this happened? And what can I do to raise this score to a 640 as quickly as possible?
04-18-2013 08:53 AM
I have a few other collections on there but they are medical bills. The report says that they are supposed to be taken off in a few months because they are so old. Also, a lender that I was working with said she didn't see anything that stood out and that she just thought I needed more time. But this was said before I paid off the two collections. I also have some student loans on there but none of those are in default.
04-18-2013 01:47 PM
It's not impossible that the payment could have been part of the drop, but I'm also inclined to think that if all your credit card balances were at zero that might be a factor too. For optimum scoring, you'll want to have a small balance on one. So two cards that report at zero, and one that reports with less than 9%. For whatever reason, there's a score ding when all cards are at zero. Even $10 is better than zero.
Don't lose hope. This could be a fixable drop.