topic Re: Score Continuing to Drop Despite Paying Off Debt!!! in Understanding FICO® Scoring

Score Continuing to Drop Despite Paying Off Debt!!! (Update Score Going Up!!!)

MattieNumNums — Sat, 11 Jun 2011 18:41:37 GMT

My score has dropped almost 50 points this month and I am extremely discouraged. I have paid off all my collections accounts and have received 2 new credit cards. My score went up and than just dropped for no reason at all by 40 points and than when my new credit card hit my report it dropped another 10 points. I have no clue what to do anymore. I was in better shape when I was a dead beat.

*** Update Please read the thread. My expirieince has been getting much better ***

Re: Score Continuing to Drop Despite Paying Off Debt!!!

haulingthescoreup — Thu, 28 Apr 2011 18:30:19 GMT

You're pulling a FICO score from here, right?

What were the negatives listed on screen 2 before, and what are they now?

Re: Score Continuing to Drop Despite Paying Off Debt!!!

MattieNumNums — Sun, 01 May 2011 16:59:47 GMT

That was from here.

The negatives haven't changed.

The only thing that has changed has been me receiving a new Credit Card but the score was dropping before than.

Another crazy thing, I paid for my Transunion score here and its a 592. A lot closer to the 599 I was at when this freefall started.

Re: Score Continuing to Drop Despite Paying Off Debt!!!

Anonymous — Mon, 02 May 2011 14:20:01 GMT

It's really really hard to know what's going on without seeing your reports and what's on them.

A new account often dings folks a few points but they seem to regain them within a few months, so that one is kinda predictable.

The drop is possibly rebucketing or sometimes a change on your report that is difficult to decipher. If possible, have someone look at your report and help you figure out what has changed. IME, A second set of eyes is alway helpful.

Sometimes you can see a rebucketing effect by looking at the simulator. Your new best action may give you a higher score than you had access to before - so a temporary drop is easier to handle when you see the light at the end of the tunnel.

I've been though some significant rebuilding and would be upset if I didn't understand why a significant drop had occurred on my reports as well.

My best advice is to hang in there, because following the FICO mantra (pay on time, low utilization, no new accounts, clean up baddies) seems to work very very well for increasing FICO scores in the long run. Don't give in to frustration - keep on keepin' on.

Re: Score Continuing to Drop Despite Paying Off Debt!!!

llecs — Mon, 02 May 2011 19:32:06 GMT

And know, OP, that paying a collection will never help your FICO for as long as it reports.

I'd expect a drop due to the new accounts being added, but 50 does seem steep. Did utilization increase once they reported?

Re: Score Continuing to Drop Despite Paying Off Debt!!!

MattieNumNums — Fri, 06 May 2011 19:37:05 GMT

My damn score dropped again today. I called MyFICO and they were NOT helpful at all. I disputed 3 accounts showing up as delinquent and they were updated to paid. My score has dropped almost 60 points in 1 1/2 months and all of my negative reports minus 2 are paid and in good standing. The credit system is a joke and a fraud. I've done everything I can and my score keeps going down and I get NO answers. All I get it the same recanned bull answer of well scores change. No crap someone tell me right now why my score has gone down when things are paid. I'm so frustrated. I've spent close to 10 grand getting out of debt and I was in better shape before I started this worthless journey. I kept telling the phone rep that this is only happening on Experian and that my Transunion is fine but she continued to ignore me.

Re: Score Continuing to Drop Despite Paying Off Debt!!!

MattieNumNums — Fri, 06 May 2011 19:36:16 GMT

I also, cancelled my MYFICO account. The customer service everytime I have called has been terrible. I get no anwers from anyone. Someone in this vast universe must have an answer as to why paying off bills and being in good standing = lower credit scores than when I was a dead beat who didn't pay anything.

Re: Score Continuing to Drop Despite Paying Off Debt!!!

llecs — Fri, 06 May 2011 19:54:47 GMT

@MattieNumNums wrote:
I kept telling the phone rep that this is only happening on Experian and that my Transunion is fine but she continued to ignore me.

Was this on Experian? You can't access your Experian report on this website.

Per the score drop, disputing accounts can drop your score.

Re: Score Continuing to Drop Despite Paying Off Debt!!!

MarineVietVet — Fri, 06 May 2011 20:13:42 GMT

@MattieNumNums wrote:
My damn score dropped again today. I called MyFICO and they were NOT helpful at all. I disputed 3 accounts showing up as delinquent and they were updated to paid. My score has dropped almost 60 points in 1 1/2 months and all of my negative reports minus 2 are paid and in good standing. The credit system is a joke and a fraud. I've done everything I can and my score keeps going down and I get NO answers. All I get it the same recanned bull answer of well scores change. No crap someone tell me right now why my score has gone down when things are paid. I'm so frustrated. I've spent close to 10 grand getting out of debt and I was in better shape before I started this worthless journey. I kept telling the phone rep that this is only happening on Experian and that my Transunion is fine but she continued to ignore me.

I agree that the journey back can often be frustrating, puzzling, and sometimes seems backwards but it's not worthless at all. You have $10,000 less in debt and that's something to celebrate. I've always held the view that paying down and/or paying off debt always is a bigger priority than any credit score.

It usually takes time to learn about credit management. Should it be so seemingly complicated? In my opinion absolutely not but all we can do is learn how to work that system to our advantage. If you stay around and continue to read and research and ask questions I'm confident you'll learn what to do.

The worst thing you can do is give up because then you'll never recover. No situation is hopeless. If I can do it anyone can.

The knowledge and advice available here is second to none in my opinion. Tap into that knowledge and be patient and you'll be fine.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Re: Score Continuing to Drop Despite Paying Off Debt!!!

Anonymous — Sat, 07 May 2011 23:05:31 GMT

I really hope this answer helps you and not frustrate you anymore. One, paying off debt that is in collections, does 0 to help you what so ever. My advise in the begining to you would have been, call the collections co and tell them if they want the cash, you want them to remove their collection off your report. That is the only time when you will benefit from a credit fico increase. Paying it off, makes the report date a current date vs the older date so the change in that date of reporting hurts the score. Then, because you have those negs. and you are applying for new credit, fico says you are a risk of defaulting so your score gets hit again. On the good note, if you pay the new credit cards on time every month, within 6 months, you will start to see increase in score. As your collection acct age, your credit score will increase. The only time paying a debt helps your score sooner, is if it is 30 to 60 days pass due then you bring it current. other wise, you have to wait for that collections to fall off to see a big move up in your fico. SO, if you have a collections, for your fico, makes no sense to pay them but be aware, if they sue you in court and put a judgement on you, then, that would haurt, bad. So it is a riske factor, pay them to know they wont call but yet it wont help fico in short term or dont pay and just let it drop off in 7 years depending on what state you are in. Some states, 4 or 5 years it can be removed. I hope this helps. Dont give up! pay those new credit cards on time. Time is your best friend in this situation!!!

Re: Score Continuing to Drop Despite Paying Off Debt!!!

haulingthescoreup — Sun, 08 May 2011 01:27:18 GMT

@MattieNumNums wrote:
That was from here.

The negatives haven't changed.

The only thing that has changed has been me receiving a new Credit Card but the score was dropping before than.

Another crazy thing, I paid for my Transunion score here and its a 592. A lot closer to the 599 I was at when this freefall started.

But could you please list the negatives here, in order, from the older report and the newer one?

And to repeat llecs' question earlier, you said something about Experian. Did you mean Equifax? We can no longer buy our Experian FICO scores.

Re: Score Continuing to Drop Despite Paying Off Debt!!!

MarineVietVet — Sun, 08 May 2011 05:07:44 GMT

@Anonymous wrote:
I really hope this answer helps you and not frustrate you anymore. One, paying off debt that is in collections, does 0 to help you what so ever. My advise in the begining to you would have been, call the collections co and tell them if they want the cash, you want them to remove their collection off your report. That is the only time when you will benefit from a credit fico increase. Paying it off, makes the report date a current date vs the older date so the change in that date of reporting hurts the score. Then, because you have those negs. and you are applying for new credit, fico says you are a risk of defaulting so your score gets hit again. On the good note, if you pay the new credit cards on time every month, within 6 months, you will start to see increase in score. As your collection acct age, your credit score will increase. The only time paying a debt helps your score sooner, is if it is 30 to 60 days pass due then you bring it current. other wise, you have to wait for that collections to fall off to see a big move up in your fico. SO, if you have a collections, for your fico, makes no sense to pay them but be aware, if they sue you in court and put a judgement on you, then, that would haurt, bad. So it is a riske factor, pay them to know they wont call but yet it wont help fico in short term or dont pay and just let it drop off in 7 years depending on what state you are in. Some states, 4 or 5 years it can be removed. I hope this helps. Dont give up! pay those new credit cards on time. Time is your best friend in this situation!!!

This doesn't apply to collections. I have been guilty in the past of spreading this in error.

Collections are scored off the date of assignment, not the DOLA. A change in DOLA shouldn't affect the score. .

This is such a common belief that we're trying to find examples with before-and-after reports where it happened, in order to see what's going on. If either the CA or the CRA is handling the data incorrectly, it needs to be corrected.

Here's a thread discussing this: Settle or Pay in Full?

Again, I'm not saying that it doesn't happen, but it's not supposed to, if the CA is reporting correctly and if the CRA is putting the info into the correct data fields.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Re: Score Continuing to Drop Despite Paying Off Debt!!!

MattieNumNums — Sun, 08 May 2011 05:39:10 GMT

Yes it was Equifax my apologies.

The changes are as follows:

I had one collections account completedly removed and the other 3 I disputed were unchanged.

Re: Score Continuing to Drop Despite Paying Off Debt!!!

haulingthescoreup — Sun, 08 May 2011 06:17:19 GMT

@MattieNumNums wrote:
Yes it was Equifax my apologies.

The changes are as follows:

I had one collections account completedly removed and the other 3 I disputed were unchanged.

OK, I do understand that you're posting the changes that you have seen. What I was asking is if you can post the negatives that get listed on your reports, both the before and after.

They often seem irrelevant or unfair or whatever, but the negatives are what drive your scores, pure and simple. Something changed on your reports to create the score change, and the negatives should show what changed. It might seem like nothing at all, but something triggered that change.

As llecs mentioned above, sometimes disputing can hurt scores, by removing an account from scoring considerations. In other words, the positive aspects of an account might outweigh any negatives, and IF the disputing took it out of scoring (this doesn't always happen with disputes), that might be at least part of the reason for the score drop. If so, there will be some sort of change on the listed negatives, like a change in history, a change in credit mix, a change in number of accounts, etc.

Again, these things often don't look important to us consumers, but the scoring algorithm crunches them in a way that results in a score change, and the things that the algorithm thinks are problems on your reports are what are listed as the negatives on screen two.

Re: Score Continuing to Drop Despite Paying Off Debt!!!

MattieNumNums — Thu, 19 May 2011 19:06:15 GMT

Those had no positives in them. They were straight up collections accounts. My score went up to 574 this week because one of the disputes actually went my way and they updated the information. Another negative record was completely removed. The problem I have with MyFico is that my FAKO score is exactly the same and I would rather see my credit report right now. It sucks that I can't pull my report as many times as I want like on Freecreditreport. It helps when you are tracking things down not to have to constantly drop coin on a credit report.

Re: Score Continuing to Drop Despite Paying Off Debt!!!

MattieNumNums — Thu, 19 May 2011 19:13:24 GMT

Wanted to add. I just pulled up my scores today.

Transunion - 603 (was 495 in Feb of this year)

Equifax - 574 (was 599 last month went all the way down to 545)

It appears my Transunion scores are def. keeping up with the bills I have been paying off. Both reports are almost dead accurate and the same excpet on Transunion I have an addition small collections account (for 70 dollars I am paying this week.) Its so strange how both reports are almost identical but I have an extra 2 years of history (good history) on my Equifax yet the score is still so much lower!

Re: Score Continuing to Drop Despite Paying Off Debt!!!

haulingthescoreup — Fri, 20 May 2011 03:33:05 GMT

@MattieNumNums wrote:
Wanted to add. I just pulled up my scores today.

Transunion - 603 (was 495 in Feb of this year)
Equifax - 574 (was 599 last month went all the way down to 545)

It appears my Transunion scores are def. keeping up with the bills I have been paying off. Both reports are almost dead accurate and the same excpet on Transunion I have an addition small collections account (for 70 dollars I am paying this week.) Its so strange how both reports are almost identical but I have an extra 2 years of history (good history) on my Equifax yet the score is still so much lower!

Did you ever look at the second screen on your reports... Again, it's not what you have seen changing that affects your scores; it's what those negative factors on screen 2 are. That's what would help us tell you what is going on.

But congrats on the great progress that you've made!

Re: Score Continuing to Drop Despite Paying Off Debt!!!

MattieNumNums — Fri, 27 May 2011 14:36:27 GMT

My Equifax report is a mess. It has a ton of duplicate entries. I have called both the creditors and Equifax and both are pointing to each as the blame. Such a broken system.

Re: Score Continuing to Drop Despite Paying Off Debt!!!

Anonymous — Fri, 27 May 2011 23:10:55 GMT

@MattieNumNums wrote:
My Equifax report is a mess. It has a ton of duplicate entries. I have called both the creditors and Equifax and both are pointing to each as the blame. Such a broken system.

We've had several duplicate accounts reporting between DH and I.

Luckily, a short & simple dispute letter to each of the CRA's has always done the trick for us. Might work better than a phone call.

Actually, we've had good luck with the online disputes for this particular issue, as well.

Re: Score Continuing to Drop Despite Paying Off Debt!!!

Anonymous — Fri, 27 May 2011 21:43:03 GMT

Paying off collection change the date on them making them current and as a consequence your score drops,