Credit Score Dropped - No Idea Why???

[Anonymous]

My credit is not very good, but last week it got much worse, when I thought it would improve.  I had an Equifax score of 631.  I have high revolving balances that I'm paying off.  I had one late payment (30 days) in January of 2009.  No other late payments.  I had one collection for a $52 medical debt which I paid off.  I have a mortgage that is in good standing.  After all of that, my score was, again, 631.

I called the medical company which filed the collection and asked that they call the collection agency to remove the negative account from my credit report.  They agreed since it was paid and it was a debt less than $500 in the first place.  About 2 days later, I got a ScoreWatch alert saying my FICO score had decrease.  When I went to check it out, to my surprise it had dropped 25 points to 606!  I then checked all three of my credit reports, and there are NO changes other than the collection account that was previously reported was in fact removed (from all 3).

So my question is this - since nothing else changed (other than a balance increase of a mere $53 on one account 5 days AFTER my score decreased - a considerably small increase relative to my balances), why would it drop?  ScoreWatch even says that my FICO score dropped on a day with no credit alerts.  What gives?!?

PLEASE HELP!  I want to improve my credit score as quickly as possible (I know it will take time), as I'll be in the market for a new car in about 1 year...hopefully!

I was also considering negotiating something with the creditor reporting 1 late payment to try to have that negative report removed...is this something I should still pursue?  I know the most important thing is paying down my debt, which I'm working on.  Is there anything else that someone can recommend, or offer insight as to why a collection being deleted would actually hurt my score so much?

[joestay]

What was you AAoA before and after?

[Anonymous]

I'm not exactly sure how to calculate AAoA, but I can say that before the drop I had 11 accounts (including 2 school loans), dating back to 9/2000 (this is one school loan).  Oldest charge account opened 8/2004.  Since the drop, I have not opened any new accounts.  However, I have opened 3 in the last few months - perhaps that has something to do with it?  But again, those were opened between January and March of this year, over a month prior to my score dropping.

[MarineVietVet]

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@Anonymous wrote:

I'm not exactly sure how to calculate AAoA, but I can say that before the drop I had 11 accounts (including 2 school loans), dating back to 9/2000 (this is one school loan).  Oldest charge account opened 8/2004.  Since the drop, I have not opened any new accounts.  However, I have opened 3 in the last few months - perhaps that has something to do with it?  But again, those were opened between January and March of this year, over a month prior to my score dropping.

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Your AAoA is the sum of the ages of every account on your report, whether open or closed, calculated in months, divided by the number of accounts and then divided by 12. I use the division by 12 to make it easier to convert into years. This is measured from the time each account was opened until present.

You’ll need to figure the age of each account, open or closed, on each report. If all three reports are identical, you're in luck; otherwise, you'll need to run this for each report.

From a BK years ago to:

9/09 EX pulled by lender 802
3/10 EQ- 800
4/10 TU -772

You can do the same thing with hard work

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[Anonymous]

+1 to the previous posts.  Calculating your AAofA before and after the score change will help you figure out what's going on - especially since you added new accounts.

If you are pulling your reports here at myfico.com, what is showing up on your scales?  There should be factors  that are helping your credit and factors that are hurting your credit.  What were they before and what are they now?  That's probably the most telling.

Above all, don't get discouraged.  If you were rebucketed due to loss of the derogatory or due to a change in AA of A, that may have prompted a score change as well.  See if you can give us the "scale" info from your reports - we can probably give you some good feedback from that.