topic Re: FICO Decrease after having collection removed?! in Understanding FICO® Scoring

FICO Decrease after having collection removed?!

Anonymous — Wed, 13 Mar 2013 01:40:19 GMT

Hello. As of March 8, I was successful in having a collection account removed from my Equifax credit file. I now have none. I waited excitedly for the ScoreWatch alert stating that my score had gone up. Instead, I lost 1 point and the alert gave this reason: "This score decrease may be caused by this new reason: you have a public record or collection in addition to a serious delinquency on your credit report". Delinquency in the past? Yes. Public records? No. Collections? Not anymore. So I bought my report for today. I confirmed the absence of collections and public records. I just can't get my head around losing points for getting a collection off my record. Any thoughts? This is gonna drive me nuts.

Re: FICO Decrease after having collection removed?!

atarvuzdar — Wed, 13 Mar 2013 01:45:12 GMT

Was the collection very old? If it was an old collection then it may not have been negatively affecting your score very much. Additionally, if removing the collection caused your average age of accounts to decrease enough that could have caused the score drop. It happens sometimes, unfortunately, but the good news is that now you've gotten rid of the collection your score can increase farther than it could have before when your report wasn't quite as clean as it is now.

This is presuming, of course, you didn't have any other negative information affecting your report such as higher balances reporting at the same time, etc.

Re: FICO Decrease after having collection removed?!

llecs — Wed, 13 Mar 2013 01:45:22 GMT

OP, was this a charge-off or was this a collection?

How severe are the remaining delinquency(or -ies)?

SW alert reasons should never be taken as a firm reason. SW isn't alerting you to the dropped baddie, since SW doesn't alert to dropped baddies. You are specific on the 3/8 date. Did you pull EQ from somewhere to see that the collection was off?

Re: FICO Decrease after having collection removed?!

Anonymous — Wed, 13 Mar 2013 02:08:18 GMT

I'll attempt to answer the questions posed in the replies without missing anything. To answer atarvuzdar; The collection was pretty old, slated to come off next year. It was only for $91. Also included in the alert was a balance increase on a credit card. From $9 to $14. Could a $4 increase hurt my score? If that's the case, no sweat. But I was definitely unnerved by the language of public record or collection that was used in the alert. To answer llecs; it was a collection (utility bill). There is an account showing a $0 balance and $0 due from 2007. Veterans Affairs overpayment. Status is listed as +120 days late. Should I dispute that? And lastly, yes I pulled my free annual report after I got the notice that Equifax resolved my dispute. I wanted to confirm it was in fact removed. That was on 3/8. I probably didn't answer the questions as concisely as I'd like to, but am greatful for the insight. Thanks!

Re: FICO Decrease after having collection removed?!

Anonymous — Wed, 13 Mar 2013 03:09:23 GMT

Something definetly must have changed.I had a collection from 09 that I successfully managed to get removed from my credit report and My score jumped 75 points (it was the only negative item on my cr.no lates, nothing).maybe a little bit of time will help stabilize your score

Re: FICO Decrease after having collection removed?!

Anonymous — Wed, 13 Mar 2013 03:24:47 GMT

You could have been rebucketed with the collection coming off.

Re: FICO Decrease after having collection removed?!

Anonymous — Wed, 13 Mar 2013 03:56:51 GMT

I'm not sure I understand "rebucketed". I'm not really familiar with the terminoligy used on here yet. Shows my ignorance, I suppose. Anyways, I should have seen a score increase from this, right? I guess I'll call customer service tomorrow. I noticed you can call them if you have questions regarding your FICO score. Just hoping to get some kind of answer. Sucks to see your score actually decrease when you are taking positive steps...

Re: FICO Decrease after having collection removed?!

Anonymous — Wed, 13 Mar 2013 04:06:06 GMT

Read this thread. It can explain it better than I can:

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Understanding-quot-rebucketing-quot/td-p/523834

Re: FICO Decrease after having collection removed?!

Anonymous — Wed, 13 Mar 2013 04:09:32 GMT

Thanks!

Re: FICO Decrease after having collection removed?!

llecs — Wed, 13 Mar 2013 04:12:30 GMT

@Anonymous wrote:
I'm not sure I understand "rebucketed". I'm not really familiar with the terminoligy used on here yet. Shows my ignorance, I suppose. Anyways, I should have seen a score increase from this, right? I guess I'll call customer service tomorrow. I noticed you can call them if you have questions regarding your FICO score. Just hoping to get some kind of answer. Sucks to see your score actually decrease when you are taking positive steps...

FICO scoring is complex. FICO built into the formula different tiers or buckets. Your score is also dependent on others' credit. This is actually a good thing so that a person with only a year of credit history isn't directly compared to someone with 30 years of history. Or someone with a BK reporting isn't directly compared to someone with a pristine history. As your credit changes, then you can move from one bucket to another. Sometimes when you change scoring buckets, then your score can drop, but that means you are set up for a larger increase beyond where you could have gone before.

IMO, you weren't rebucketed because you still have a very major baddie reporting. Had you been 100% baddie-free, then I'd guess potential rebucketing. I think something else happened. Where did the collection report on your FICO report? In Accounts or in Collections?

Re: FICO Decrease after having collection removed?!

Anonymous — Wed, 13 Mar 2013 04:16:14 GMT

Well, darn. Sorry.

Re: FICO Decrease after having collection removed?!

llecs — Wed, 13 Mar 2013 04:18:12 GMT

@Anonymous wrote:
Well, darn. Sorry.

It was at the top of my list.

Re: FICO Decrease after having collection removed?!

Anonymous — Wed, 13 Mar 2013 04:18:42 GMT

After reading that, It makes sense. Hopefully my score recovers over the next few months...

Re: FICO Decrease after having collection removed?!

Anonymous — Wed, 13 Mar 2013 04:23:51 GMT

llecs, to answer your question; it was listed in the collections portion of the report. I compared my score power report from a week ago with today's and it is not present in today's but is in last week's. So if not rebucketing, what else? Hmmm....

Re: FICO Decrease after having collection removed?!

llecs — Wed, 13 Mar 2013 04:30:47 GMT

Util...maybe crossing that 10% threshold did it. Maybe there was a small gain from the removal of the CA that was offset by a loss in util. A simple wash. Who knows.

Re: FICO Decrease after having collection removed?!

Anonymous — Wed, 13 Mar 2013 12:57:11 GMT

I don't know. Disappointing though. Thanks again for all the thoughts and insight.

Re: FICO Decrease after having collection removed?!

Anonymous — Wed, 13 Mar 2013 15:31:05 GMT

I spoke to customer service. She looked up my info and explained that I was "rebucketed". The reason the alert contained the language about my file containing collections, public records, etc, was because my new "bucket" is populated by people who do not have these things. She further explained that the reason I did not see a score increase with the removal of the collection was due to its age. And finally, the 1 point decrease was due to the $4 balance increase on my credit card. So, mystery solved. Thanks for the replies!

Re: FICO Decrease after having collection removed?!

llecs — Wed, 13 Mar 2013 15:35:24 GMT

@Anonymous wrote:
I spoke to customer service. She looked up my info and explained that I was "rebucketed". The reason the alert contained the language about my file containing collections, public records, etc, was because my new "bucket" is populated by people who do not have these things. She further explained that the reason I did not see a score increase with the removal of the collection was due to its age. And finally, the 1 point decrease was due to the $4 balance increase on my credit card. So, mystery solved. Thanks for the replies!

I'd say she's wrong if the 120-day is still reporting. Typically a rebucket results in a larger decrease too when an older CA is removed (but not always). One way to tell is to pull your EQ FICO report. If the pos/neg items are jumbled up, then that's a clear indicator of rebucketing. If relatively the same (minus the collection notation), then no rebucketing. And when I say the pos/neg reasons are jumbled is if your #1 postivie thing helping became a negative and a top negative became a positive.

Re: FICO Decrease after having collection removed?!

Anonymous — Wed, 13 Mar 2013 17:24:21 GMT

llecs, I assume you're talking about the portion of the report with the scale? I compared my last report with yesterday's and the negatives are different. Previously, my top negative was collections/delinquency. Now it is serious delinquency. Positives remain the same. I guess that does indicate a rebucket? Also, since you mentioned the 120 days late account, I'm wondering if I should do something about that. It's been paid for 5 years now. The status is +120 days past due. Is that correct? Should it be something else. Maybe I'm thinking about it wrong, but it almost makes it sound as if I still owe it and am not paying. Should I dispute the status? I don't want to just dispute things indiscriminately and hope it works.

Re: FICO Decrease after having collection removed?!

llecs — Wed, 13 Mar 2013 19:07:28 GMT

@Anonymous wrote:
llecs, I assume you're talking about the portion of the report with the scale? I compared my last report with yesterday's and the negatives are different. Previously, my top negative was collections/delinquency. Now it is serious delinquency. Positives remain the same. I guess that does indicate a rebucket? Also, since you mentioned the 120 days late account, I'm wondering if I should do something about that. It's been paid for 5 years now. The status is +120 days past due. Is that correct? Should it be something else. Maybe I'm thinking about it wrong, but it almost makes it sound as if I still owe it and am not paying. Should I dispute the status? I don't want to just dispute things indiscriminately and hope it works.

I still say no to rebucketing, but you never know. Definitely send GWs on the 120. My answer might be different if it were in its 6th year when it's months away from disappearing. ETA...and it would also depend how much this TL helped your AAoA.

They can report as +120 if ever in the past the account were 120 or worse. As soon as the late disappears, then the status will disappear.