topic Re: Deleted collections causing score decrease in Understanding FICO® Scoring

Deleted collections causing score decrease

Anonymous — Sun, 05 Jan 2020 12:00:53 GMT

Hello!
I’m new to this forum however have had myFICO since 2012 and monitor regularly. The first several years in algorithm made sense as activities/actions would take place. However, the past 2 years or so have shown perceived significant change to algorithms and results to my scores. Most recent of many similar ex: a collection was just deleted, yet caused score to drop by 12 points. I have kept of with the FAQ and researched all the ways to improve credit and have followed suit. Not ONE late payment, no baddies, etc.. with exception to several medical bills posted. Otherwise perfect and responsible activity. My score however doesn’t budge out of low to mid sixes. Lowered cc and mortgage balances sometimes help and sometimes hurt.
Any ideas as to why??
Thanks!

Re: Deleted collections causing score decrease

SouthJamaica — Sun, 05 Jan 2020 13:57:22 GMT

@Anonymous wrote:
Hello!
I’m new to this forum however have had myFICO since 2012 and monitor regularly. The first several years in algorithm made sense as activities/actions would take place. However, the past 2 years or so have shown perceived significant change to algorithms and results to my scores. Most recent of many similar ex: a collection was just deleted, yet caused score to drop by 12 points. I have kept of with the FAQ and researched all the ways to improve credit and have followed suit. Not ONE late payment, no baddies, etc.. with exception to several medical bills posted. Otherwise perfect and responsible activity. My score however doesn’t budge out of low to mid sixes. Lowered cc and mortgage balances sometimes help and sometimes hurt.
Any ideas as to why??
Thanks!

1. Contrary to your headline, removal of a collection item would never cause a score decrease.

2. Medical collections being added to your report would cause score decreases.

3. Lowering a mortgage balance would never cause a score decrease.

4. Lowering a credit card balance would never cause a score decrease (unless all revolving balances were at zero, in which case a temporary score decrease might occur in some scoring models).

Bottom line: you're going to need to take a much closer look at your reports if you're going to find out what you need to do to pick up your scores. If you give us detailed information, we'll probably be able to answer your presently unanswerable question.

Re: Deleted collections causing score decrease

Anonymous — Sun, 05 Jan 2020 16:13:58 GMT

Thank you for your prompt response!
According to MyFICO alerts, it stated that the change in score was from a deleted collection (wish I can post a screen shot of it here- perhaps I am reading the alert wrong, but pretty sure not).
I have printed my detailed credit from all three and see that in total were 17 medical collections from over the course of 6 years. I completely agree with what you detailed above which is why my eyebrow is raised with this one.

Re: Deleted collections causing score decrease

SouthJamaica — Sun, 05 Jan 2020 16:30:33 GMT

@Anonymous wrote:
Thank you for your prompt response!
According to MyFICO alerts, it stated that the change in score was from a deleted collection (wish I can post a screen shot of it here- perhaps I am reading the alert wrong, but pretty sure not).
I have printed my detailed credit from all three and see that in total were 17 medical collections from over the course of 6 years. I completely agree with what you detailed above which is why my eyebrow is raised with this one.

You are absolutely reading it wrong. A common mistake among MyFICO subscribers.

MyFICO alerts don't provide reasons for a score change. There are certain events which trigger MyFICO alerts. If there happens to be any difference between your present score at that particular bureau and the previous score reported to you from that bureau, the score change is tacked on to the alert. There is not necessarily any connection at all between the score change and the alert substance.

MyFICO explains this in the "learn more" link contained in the alert:

"Why did my score go up when I got an alert for something negative (or why did my score go down when I got an alert for something positive)?
The short answer: Your FICO® Score may change because of other events not monitored by an alert.
Whenever we send you a credit alert, we also send an updated FICO Score. To ensure you get the most current score, we calculate it based on your entire credit report at that point in time—not just the new information on the alert. This means your new score may reflect other changes that are outside of the things we watch for (see everything we monitor).
Sometimes you may see your score increase when you think it should’ve decreased, and vice-versa, but you’ll always have your most up-to-date and accurate score."

Re: Deleted collections causing score decrease

Remedios — Sun, 05 Jan 2020 16:19:38 GMT

Deleted collection would not cause a score drop. If one gets deleted, but others remain, there may not be any changes at all.

If there are no utilization changes, or number of cards reporting balances, I'd look for collection that may not have been reporting every month, but did so at the time you saw score decrease.
Scoring drop can occur if collection is paid to $0.00 but it stayed on your report. It's the update to negative account that causes the drop, not the payment.

Re: Deleted collections causing score decrease

Anonymous — Sun, 05 Jan 2020 16:25:42 GMT

Thank you so much! It was not paid but deleted because of tenure of debt. Is the drop of 12 points from it just updating as having been deleted? No other collections have hit at same time that I can see from detailed reports, but will triple check.
Thanks again for your assistance!

Re: Deleted collections causing score decrease

Remedios — Sun, 05 Jan 2020 16:36:40 GMT

No, if it got deleted, it would not have caused the drop.
Update on collections that are still unpaid would cause drop.
Also, look at utilization on your cards.
Did it increase? Any new accounts?
MyFico alerts are not recieved in real time, there is some lag there, so if you got the alert today, change could have happened days ago, if not longer.
Easiest way to do this is to look at report before and after change to see what's different. There are too many moving parts to be able to accurately answer it without having a complete picture.

Re: Deleted collections causing score decrease

Anonymous — Sun, 05 Jan 2020 16:39:16 GMT

Great feedback, thank you! Will do!

Re: Deleted collections causing score decrease

Anonymous — Sun, 05 Jan 2020 21:03:18 GMT

"with exception to several medical bills posted. Otherwise perfect and responsible activity. My score however doesn’t budge out of low to mid sixes."

can you clarify this part? Medical bills do not generally post on your credit report unless they are collections. If you have multiple medical collections on your report that is why your score is not moving. The most damaging item gives you a max scoring penalty. When other items fall off or get removed your score will not improve until the max penalty item goes away. Also one of those medical collections could have updated and that could account for the 12 points

Re: Deleted collections causing score decrease

Anonymous — Sun, 05 Jan 2020 23:45:54 GMT

Thank you for your response and help! I meant that the collections are all unpaid medical collections with most recent being in October of 2018. 2 days ago, a drop of 12 points was reported and when looking at “reason why”, it stated that a collection had been deleted. I thought that would help my score but it dropped instead. I didn’t think it would count as an update as it would had I paid it and therefore causing it to update as recent.

Re: Deleted collections causing score decrease

Anonymous — Sun, 05 Jan 2020 23:49:15 GMT

Another question... when you say “max penalty” is it for ALL medical collections or those of certain amounts? Mine range anywhere from $111 to $800. Does it make a difference if the bigger ones were to fall off from tenure (still unpaid)?

Re: Deleted collections causing score decrease

coachbeau — Tue, 07 Jan 2020 05:22:05 GMT

I did a pay for delete and when it came off my score dropped. Also, I've had my score drop when other derogatory items have fallen off.

Re: Deleted collections causing score decrease

Revelate — Tue, 07 Jan 2020 22:03:44 GMT

@coachbeau wrote:
I did a pay for delete and when it came off my score dropped. Also, I've had my score drop when other derogatory items have fallen off.

A collection is something that will banish one to the derogatory scorecards.

It's possible if there isn't much positive history, and say a 30D or 60D late or whatever on file (two different resulting scorecards), that because of the way the scorecards overlap it's possible to move down in points even if you're moving to a "cleaner" scorecard.

Will state though that if you have multiple collections, and one of them comes off, that will not result in a score drop.

The majority of times it's not rebucketing which causes a drop, it's something else that changes in the file but most people's files just aren't constant enough to really tease out every single change.

Re: Deleted collections causing score decrease

Anonymous — Wed, 08 Jan 2020 02:08:49 GMT

Thank you so much for your feedback

Re: Deleted collections causing score decrease

bassethoundmom — Thu, 06 Feb 2020 19:42:20 GMT

This happened to me today. I'm not new at this. I looked at every line item and the only change was a medical collection was deleted. My score dropped 28 points in the past 7 days. WTH?

Re: Deleted collections causing score decrease

Anonymous — Sat, 08 Feb 2020 07:01:28 GMT

@bassethoundmom Was your only collection? A lot can happen in seven days. What version? Source?

+1 to what Rev said.

Re: Deleted collections causing score decrease

Anonymous — Tue, 23 Mar 2021 08:47:46 GMT

I just experienced this and its because of the age of the credit account I'm so upset my credit score dropped 37 points just from getting a collection account removed !!!

Re: Deleted collections causing score decrease

Anonymous — Tue, 23 Mar 2021 15:39:50 GMT

For each of you above that had a loss that you think may be related to the collection being removed, can you please give me more profile information for each of you?

For instance I would like to know your average ages of accounts before and after. I would like to know if there were any other changes between before and after.

Do you have reports before and after or are you just relying on alerts? Which version specifically did you lose points on? and very important, do you have any remaining collections public records or other derogatories? I'd also like to get your before and after negative Reason Codes, for any versions that changed.

do you know what scorecard your on? If not, detail your derogatories, tell me your oldest account, how many accounts are on your credit report? how old is your youngest Revolver and Account?