topic Re: Score Drop 23 points from collection removal!! in Understanding FICO® Scoring

Score Drop 23 points from collection removal!!

Anonymous — Fri, 01 Jun 2012 19:15:58 GMT

How is it possible with the removal of a 30K collection item? Happened to my Experian Score.

Re: Score Drop 23 points from collection removal!!

RyVision — Fri, 01 Jun 2012 19:22:00 GMT

I've read on here that can happen if the collection was old and added to your oldest account age and AAoA. Seems odd but makes sense. I don't think it's long lasting however, maybe a few months but everyone's different due to so many variables.

Re: Score Drop 23 points from collection removal!!

Anonymous — Fri, 01 Jun 2012 19:27:35 GMT

Was it factoring into your utilization though?

Re: Score Drop 23 points from collection removal!!

Anonymous — Fri, 01 Jun 2012 19:43:06 GMT

It sounds like you may have been "rebucketed." Bucketing is a term that is used to describe a system of comparing credit profiles that are similar to each other. With the collection removal, it's possible that your profile is being compared to others that are collection free. The good news is that your scores will now have the potential to grow higher than they would have if you had stayed in your previous bucket.

A good explanation of this is from an older thread:

"Ultimately the rebucket will allow your scores to reach higher. You are now being compared to others with squeaky clean files and long histories. Since you have just been added to this bucket you do not look as good as the rest of the pack (shorter history than the rest for example). As your accounts age your scores will rise in this new bucket--do not worry. 8 pts is not a huge drop--others have posted much larger drops upon a rebucket.

I prefer to think about buckets like this: If there were no buckets and everyone was simply compared to everyone else it would be very hard for anyone just starting out to have hope for good scores. A person with a thin or short file would look very risky versus someone with a long established history. Hope this makes a little bit os sense, keep up your good work--your scores will rise!!"

The complete thread can be found at: http://ficoforums.myfico.com/t5/Credit-Cards/Why-would-i-get-a-8-point-drop-in-my-score-because-i-was/m-p/567229/highlight/true#M180339.

Re: Score Drop 23 points from collection removal!!

Anonymous — Fri, 01 Jun 2012 20:00:16 GMT

Dunno if this helps but it was a collection from Oct 2011 so fairly new.

Rebucketing, odd.

Re: Score Drop 23 points from collection removal!!

AZHeather — Fri, 01 Jun 2012 20:07:41 GMT

Are you sure that was the only thing that changed on your report? No new inquiries, balance on a cc, new collection, late payment, fall off of any other loan or cc tradeline? I would look at your cr and compare to your last one line by line.

Re: Score Drop 23 points from collection removal!!

Anonymous — Fri, 01 Jun 2012 21:37:43 GMT

I paid a credit card down, but all positive things.

Re: Score Drop 23 points from collection removal!!

Repo-ed — Sat, 02 Jun 2012 00:30:13 GMT

@Anonymous wrote:
I paid a credit card down, but all positive things.

This was a FICO score you pulled?

Re: Score Drop 23 points from collection removal!!

Anonymous — Sat, 02 Jun 2012 20:25:18 GMT

Not FICO because it's Experian so it's a FAKO, got it from my Credit One pre-Qual, where they do a soft pull from Experian to see if you're pre-qual for any of their cards.

Called Experian and they couldn't explain it either, but they did remove 2 collections that were due to fall off this month and September. I doubt I'll get a score change from those considering how old they were.

Re: Score Drop 23 points from collection removal!!

Anonymous — Sat, 02 Jun 2012 20:58:56 GMT

I wouldn't worry about it then. FAKOs calculate AAoA differently than FICO. Experian's PLUS is one of the worst FAKOs imo. It tends to move sporadically and often in huge swings. I don't even consider it a good indicator of where your credit is heading. Just pull your EQ FICO from here and see where you stand. That will give you a score that lenders are likely to use when granting you credit.

Re: Score Drop 23 points from collection removal!!

llecs — Sun, 03 Jun 2012 00:12:26 GMT

FAKO is as FAKO does.

Re: Score Drop 23 points from collection removal!!

sjt — Mon, 04 Jun 2012 17:54:15 GMT

@Anonymous wrote:
It sounds like you may have been "rebucketed." Bucketing is a term that is used to describe a system of comparing credit profiles that are similar to each other. With the collection removal, it's possible that your profile is being compared to others that are collection free. The good news is that your scores will now have the potential to grow higher than they would have if you had stayed in your previous bucket.

A good explanation of this is from an older thread:

"Ultimately the rebucket will allow your scores to reach higher. You are now being compared to others with squeaky clean files and long histories. Since you have just been added to this bucket you do not look as good as the rest of the pack (shorter history than the rest for example). As your accounts age your scores will rise in this new bucket--do not worry. 8 pts is not a huge drop--others have posted much larger drops upon a rebucket.

I prefer to think about buckets like this: If there were no buckets and everyone was simply compared to everyone else it would be very hard for anyone just starting out to have hope for good scores. A person with a thin or short file would look very risky versus someone with a long established history. Hope this makes a little bit os sense, keep up your good work--your scores will rise!!"

The complete thread can be found at: http://ficoforums.myfico.com/t5/Credit-Cards/Why-would-i-get-a-8-point-drop-in-my-score-because-i-was/m-p/567229/highlight/true#M180339.

Hi-

Thanks for your explanation.

I need some clarification to make sure I have this right:

Each person with a credit profile is put in a "bucket" or is put under a certain classification based on their profile.
So person X ,who has a collection for $xxx, then pays the whole amount could be reclassified to another bucket and their profile will be compared to those in that bucket.
When they are reclassified to another bucket, their score can drop because their profile will be at the bottom of that new bucket they were put in. However there is a potential to achieve a higher score in this new bucket they were put in.