topic Re: Unexpected Score drop with CO removal in Understanding FICO® Scoring

Unexpected Score drop with CO removal

I_Love_Cards — Sun, 29 Dec 2019 18:03:06 GMT

My Equifax FICO8 dropped 13 points overnight. No new accounts/inquiries (that weren’t previously reported), no change in utilization (minor balance changes but nothing to cross a threshold for individual or aggregate). No aging of anything.

After another line by line review, the change was early removal of two (paid) charge offs that were scheduled to be deleted 5/2020. I didn’t request early exclusion-Equifax must have decided to do so (which is fine).

I still have a load of closed derogatory accounts (significant late payments - 120+ And a redeemed foreclosure) so I wasn’t expecting any real score improvement (maybe a small bit as I saw with the removal of the last collection account, but nothing significant).

But I certainly wasn’t expecting a score drop.

After further review, my AAoA is now 2 years 6 months (was 3 years and something months with the CO’s). I didn’t think there was any threshold in that range and I also thought age impacts were minimal for filthy scorecards. But with the absence of any other potentially negative change, I have to assume the age drop (or perhaps the age drop combined with other factors on my profile-aka A zillion new accounts?) is the culprit?

Anyway-just sharing in case someone googles “my charge off got deleted but my score went down”

This is a FICO8 score-not vantage (that’s probably 850 now or some such nonsense).

Re: Unexpected Score drop with CO removal

FireMedic1 — Sun, 29 Dec 2019 21:55:17 GMT

@I_Love_Cards wrote:
My Equifax FICO8 dropped 13 points overnight. No new accounts/inquiries (that weren’t previously reported), no change in utilization (minor balance changes but nothing to cross a threshold for individual or aggregate). No aging of anything.

After another line by line review, the change was early removal of two (paid) charge offs that were scheduled to be deleted 5/2020. I didn’t request early exclusion-Equifax must have decided to do so (which is fine).

I still have a load of closed derogatory accounts (significant late payments - 120+ And a redeemed foreclosure) so I wasn’t expecting any real score improvement (maybe a small bit as I saw with the removal of the last collection account, but nothing significant).

But I certainly wasn’t expecting a score drop.

After further review, my AAoA is now 2 years 6 months (was 3 years and something months with the CO’s). I didn’t think there was any threshold in that range and I also thought age impacts were minimal for filthy scorecards. But with the absence of any other potentially negative change, I have to assume the age drop (or perhaps the age drop combined with other factors on my profile-aka A zillion new accounts?) is the culprit?

Anyway-just sharing in case someone googles “my charge off got deleted but my score went down”

This is a FICO8 score-not vantage (that’s probably 850 now or some such nonsense).

For one the above in red may have held you back from gaining points. Those 120's ding the whole 7 yrs. Could it be one of them was your oldest accounts?

Re: Unexpected Score drop with CO removal

cem13 — Sun, 29 Dec 2019 22:02:37 GMT

@I_Love_Cards wrote:
My Equifax FICO8 dropped 13 points overnight. No new accounts/inquiries (that weren’t previously reported), no change in utilization (minor balance changes but nothing to cross a threshold for individual or aggregate). No aging of anything.

Anyway-just sharing in case someone googles “my charge off got deleted but my score went down”

This could also be a "re-bucket" situation. Your credit profile actually improved; however, you are now compared to others in a different group. If so, while you have a temporary drop, you have a higher upside and will gains these back rather quickly (6~12 months).

Re: Unexpected Score drop with CO removal

Revelate — Sun, 29 Dec 2019 23:06:30 GMT

Maybe rebucketing but I somewhat doubt that a CO (charge-off to be clear) puts you in any different scorecard than a 120D late or whatever. Also a foreclosure however it is counted would likely be the same.

The most likely culprit was something in the aging metrics, as already mentioned I would check former AOOA vs now not just AAOA (which I agree would be minor points if any like 3-4 if there were a breakpoint and I didn’t find one at 3 years on my own dirty file on any score I had access too which was most back then).

There is also the possibility though that two paid CO’s made the file prettier when it came to scoring within the scorecard. Having a delinquency or CO is one thing, getting the tradeline current though may matter for more than just revolving utilization. It is not something we have much data around TBH. Might be one of the contributory factors to my own TU scores with a 60D late being so suspiciously high even with the recent tag still on it.

Makes about as much sense as anything that isn’t really nailed down and honestly not even open CO scoring is really pat as it’s hard to isolate variables of this type without carefully constructed tests on specific files (like having two open CO’s and testing hardcore utilization numbers before paying one).

End of the day any negative information coming off is a good thing.

Re: Unexpected Score drop with CO removal

Anonymous — Sun, 29 Dec 2019 23:09:07 GMT

I'm pretty sure the drop is justa temporary thing, your scores schould start gradually improving over the course of the next 2-3 months if not sooner. I think a lot of this stuff is case by case as well, and everyone has different results.

Re: Unexpected Score drop with CO removal

Anonymous — Mon, 30 Dec 2019 03:03:42 GMT

Yeah I don’t think you were rebucketed either not with all those derogatory still present. I agree with @Revelate, aging or something we don’t understand.

Were those your oldest accounts?

Re: Unexpected Score drop with CO removal

I_Love_Cards — Mon, 30 Dec 2019 03:04:18 GMT

They have been paid for quite some time. They haven’t been updated for years. I’ve just been waiting for them to age off (as I have so many other derogatories - I wasn’t pushing for anything and wasn’t expecting any real score gain when these fell off). I wasn’t expecting a scorecard change with so many other derogs still there, but it’s possible there’s a dirty card for someone with no collections/charge offs/public records/bankruptcy?

I’m not sure how the almost foreclosure is coded-as it was redeemed hours before the auction and remained open/good-ish standing after that (a couple other 30D lates). I’m not sure where this would sit on a CRA (meaning would it be “worse” if the foreclosure finalized vs redeeming the loan?).

My oldest accounts are 24 years old and still intact on my reports. So AoOA is unchanged.

I wasn’t really expecting an increase. I have a lot of dirty left.

Re: Unexpected Score drop with CO removal

I_Love_Cards — Mon, 30 Dec 2019 03:17:03 GMT

And for sure-anything negative coming off is a great thing. I have quite a bit that will age off next year. And nearly all the rest the following year. I’m looking forward to it with great enthusiasm LOL.

Re: Unexpected Score drop with CO removal

I_Love_Cards — Mon, 30 Dec 2019 03:22:30 GMT

And I’ve said my oldest accounts are 24 years old like that’s helpful. Because you’re all intimately familiar with my credit profile....

My oldest accounts are 24 years old (before and after removal of the CO’s).

The CO’s were 16 & 17 year old accounts.

Not my oldest but definitely helping average age.

Re: Unexpected Score drop with CO removal

Anonymous — Mon, 30 Dec 2019 03:24:55 GMT

Once derogatories age to a certain point, there’s evidence you gain some points. That may be exactly what happened here. Then when they were deleted you lost those points. Just a guess but it’s a possibility.

There are supposed to be 4 dirty cards for version eight. Two are public record and two are derogatory without public record, meaning lates, charge-offs, and collections. It is believed they are then segmented by severity or age. But the exact workings are unknown. There are also other theories.

There’s a good graphic that was posted by @Thomas_Thumb describing segmentation. I’ll have to look for it or you may be able to find it.

Re: Unexpected Score drop with CO removal

I_Love_Cards — Mon, 30 Dec 2019 03:39:45 GMT

I’ll look for that. It seems possible that I may have shifted to a different dirty card maybe? That could help explain the drop (being worse off in a better bad bucket? Or just a different bad bucket?).

Re: Unexpected Score drop with CO removal

Anonymous — Mon, 30 Dec 2019 06:38:03 GMT

Personally I do not believe you have changed scorecards. you have too many derogatories still on file. these dropping off would not have changed that. Unless your youngest one just aged to a certain Point at the same time, I don’t see how it could happen.