topic Re: Score drop after fixing issue in Understanding FICO® Scoring

Score drop after fixing issue

Anonymous — Tue, 30 Oct 2018 15:55:21 GMT

Ok, so we are really mystified here. We have a HELOC and wanted to refinance into a conventinal loan. We did our homework, talked with several lenders and decided who had the best loan for our needs, when they ran the credit we discovered that the small town bank that had the HELOC had reported 5 "rolling 30" lates last year. Again, we did homework and then went to the bank with our arguement which included a series of emails where they had admitted to "mishandling" payments. Needless to say it was an easy sale with the bank VP to remove the lates. We checked a few days later using the annual free report and they were gone, no comments just showing no lates what so ever. We contacted the credit union and they reran the credit only to find that the scores from all three had not gone up but dropped, one by over 30 points. My wife does have some other issues, some lates from 5 years ago when she was coming out of a divorce and attempting to split accounts and such but only one random 30 day late in the last few years. Here revolving credit is at 2% the limit (yes 2%) and she has a student loan and the HELOC that both are reporting as pays as agrees with no lates ever. Why on earth did the scores all three drop after having the 5 - 30 days lates from last year removed? How does this make sense and what can be done about getting the loan at a reasonable rate with a mid score of 637? The lender is just as confused by this as we are and said in 30 years he has never seen this.

Re: Score drop after fixing issue

Anonymous — Tue, 30 Oct 2018 16:08:22 GMT

What the lender isn't seeing and what you aren't seeing is exactly what changed on your before/after credit reports. The removal of a string of late payments isn't going to adversely impact a FICO score. It may not necessarily help either, as you stated there are other late payments present from other accounts on the CR, but worst-case is that scores would stay the same. They would not drop. Since you're stating that there was a score drop, it's 100% due to a different reason other than the removal of late payments. What you'd have to do is compare your before/after credit reports line by line to see what changed. I'm not sure you have a "before" report, as you only stated that you got the "after" one once your account was cleaned up.

Re: Score drop after fixing issue

Anonymous — Tue, 30 Oct 2018 16:20:21 GMT

I understand what you are saying but that is not the case. I did a line by line comparison between the report the lender got from before and after. The only changes reported are the no late fees on the HELOC. They were run within a couple of weeks of each other and the total debt, and all other aspects of the report are the same across the board. That's why the potential lender and us are so confused by this. I truly wonder if a change being reported, even a positive one such as removing the late reports is seen by the credit bureaus as instability and thus reflected as a lower score?

Re: Score drop after fixing issue

Anonymous — Tue, 30 Oct 2018 19:15:08 GMT

No, that's not the case. There's definitely something you aren't seeing.

Scores are generated based on data at any given point in time. If the data is the same both before/after, there would be no score change. If there is a score change, the data has changed.

Removal of late payments doesn't lower score. The same way paying down high utilization can't lower score, removing inquiries, aging your file, etc. The opposite of those things (among others) can lower score of course.

Re: Score drop after fixing issue

DollyLama — Thu, 01 Nov 2018 17:07:47 GMT

BBS is right.

My first inclination would be to compare the number of accounts open and closed between the two reports you have. Going to already take a small hit with hard pull inquiry, but it was done twice. If the number of all accounts (open and closed) has decreased, it could have been an account that aged off the report. One that had a longer age than the rest, reducing the age of Oldest account, and average age of accounts.

Have any of her other accounts not been updated for a 6 mos, a year or more, but during this period, suddenly went from date last reported 2017 and now reflects 10/2018? Particularly a derog account, one with lates, or perhaps a collection/charge off account?

I will assume her revolving opens, student loans and HELOC have been open quite awhile and been reporting for months.

Re: Score drop after fixing issue

Anonymous — Thu, 01 Nov 2018 19:41:18 GMT

Just double checked to be certain and no, all the dates are identical, all of the same accounts. As I said these were less than one month apart. The only difference between the two is the lates from the HELOC are gone. The drop could be the result of the hard inquiry but as the two were pulled by the same place in the same month and those are the only ones showing in 24 months it should only be a one time, 2-3 point drop shouldn't it? I would just think that would have been more than offset by the removal of 5-30 day lates in a row from 1 year ago. We have even talked to a credit specialist who doesn't get it and calling EF or TU for an explanation was a lesson in futility. Just very confused.

Re: Score drop after fixing issue

Anonymous — Thu, 01 Nov 2018 21:14:40 GMT

Which bureau was it?

Re: Score drop after fixing issue

DollyLama — Thu, 01 Nov 2018 22:07:27 GMT

Just checking , they did pull 5, 4, 2 mortgage scores on both pulls, and not one specific vs Fico 8 on another?

Re: Score drop after fixing issue

Anonymous — Fri, 02 Nov 2018 00:31:22 GMT

EF actually went up 1 point, TU dropped 9 and EX had the 30 point decrease. As most places use the middle one that's TU.

Re: Score drop after fixing issue

Anonymous — Fri, 02 Nov 2018 00:37:25 GMT

Yes I checked, was the same pull. Hate to admit it but in mid 40s first time I have paid much attention to the scores. Of course we were monitoring the "free scores" on Lifelock and credit cards which we now know are next to useless as they use vantage and show her comfortably in the 700s.

Re: Score drop after fixing issue

Anonymous — Fri, 02 Nov 2018 00:42:51 GMT

Dont take my word on this because I honestly dont know but we are in the middle of qualifying for a mortgage and after many delays our credit had to be run again, conveniently this time my husband was 2 points off on his two highest scores. We paid on accts according to our LO's simulator and today his EX dropped almost 20 points instead of raising several as it was supposed to after the quick rescore. Our LO escalated to factual data and came back with the response that EX just changed their scoring model.
I don't know how I would ever go about verifying that, but that's where we're at. I suppose if accurate, it's possible for a score to react unexpectedly seemingly overnight.