Why does my score never improve?

[Anonymous]

I'm trying to understand why it is seemingly impossible to improve my fico and am looking for suggestions. I began building credit when I turned 18 in 2000. Since that time, I have had 6 credit cards, 4 vehicle loans and 1 mortgage. I have never made a late payment towards any of them. Four of the credit cards have since been closed (a few years ago) and I am left with two. One has a 15K limit and a 1K balance and the other has a 4.5K limit and no balance. 3 of the vehicle loans have been paid off, two of which were paid off early. I have also had a mortgage since 2003 which is in good standing and never a late payment.My credit has been run 5 times in the last 2 years, all within the same week when I was shopping for my last car loan. I have one medical collection for $64 (paid) from 2002 which was due to a billing error, but Absolute Collection refuses to remove it. If I understand correctly, a collection this old should not cause too much trouble, and my score may actually go down when it falls off next year. When I bought my home in 2003, only a year after the collection, my score was 736,  yet now it is 684. I've wanted to ask about this for some time, really, it's very frustrating for someone like myself, who has always been responsible with credit to see others claiming tens of thousands of dollars in credit card debt with better scores. I'm planning on purchasing a new home within the next year and a half and would like to get my score back up in the 700's if possible. I could get another collection or run up a bunch of credit card debt if necessary, but I would rather not.

[cobaltnv]

Welcome to the form!

Formally you have 3 Fico scores (although only 2 are viewable by you). Where did you get your 684 score? If if is not a true Fico then the number does not mean anything.

[cobaltnv]

If you have not already done so I would suggest reading "understanding your fico score" and "credit scoring 101" both of which may be found in my signature.

[Anonymous]

The medical collection should fall off this year if it is from 2002. You can either wait for it to be removed or follow the HIPAA process and get it removed. If due to fall very soon, I would just let it fall. If you get a report directly from the CRA, it should show a DOFD or a removal date(TU and EX).

If it is reported correctly, your score should not drop once it is removed, unless you are rebucketed.

On your CC, the balance you listed, is that the balance being reported?

As mentioned, are those scores from this website?

I am going to assume, correct me if I am wrong, that the 736 score came from your lender when you got your mortgage? Where did the 684 come from?

Also, you have 3 FICO scores.....1 from each CRA. You can no longer purchase your EX FICO score, but you can still purchase your EQ and TU FICO scores. If you decide to purchase these, google for a "myFICO discount code" to save you some money.

[Anonymous]

Thanks all,

The score is from equifax scorewatch. My score was in the 690's when I applied for my last vehicle loan in July 2007. SInce then I have not opened any new lines of credit (apart from that loan), I've not made any late payments, nor have I had any drastic balance increases. I did pay off two other vehicle loans since then. My score just keeps slowly going down without any obvious reason. According to equifax, the three things hurting my score the most are the collection, credit age, and heavy use of revolving credit.  The credit age excuse makes no sense, as I stated before, my score was 730 in 2003 when I only had a few years of history. Finally, I don't know what they mean by heavy use of revolving credit. Of the 20K available, I normally have a 1K balance, which doesn't seem like a lot to me. I could pay it off, but they state that my recent use of credit cards is helping my score, so what to do? Everything is being reported correctly. What's funny is that they list amount of debt as "very good" and length of history as "good", yet they state these as being the reasons that my score is nearly in the "not good" range. The last time I checked my TU and Experian scores they were both much higher, in the mid 700's I believe, but this was a few years ago. 

I have read all kinds of information on the subject, which is where I found out that the collection will drop next year and that my score may go even lower when this happens. DOFD on the collection was 10/2002.

Edit: Yes, the collection falls off this year. Don't know why I was thinking next year.

Message Edited by fico109 on 03-04-2009 11:50 AM

[Anonymous]

If the score came from the lender you were financing your vehicle with, it may be a auto enhanced FICO or it could be a different version from what is used now.

Collections, reported properly, are not counted in age. If your score drops when it is removed, it will be due to rebucketing, which is a good thing.

You need to look on your reports and see what balances are reporting on your CC. Even if you PIF each month or nearly PIF, if you don't do it before the CCC report to the CRA, it will show a higher balance than you actually carry.

The credit age comment hurting you may be because of the bucket you are in, others in your bucket may have much longer history than you, which would be why it is considered a negative factor.

Do some reading over on the Understanding FICO Scoring thread and do some searching for "buckets" or "rebucketing". Maybe this will explain some things.

When you last checked your TU and EX scores, did you do that from this site? If not, they are FAKO scores and you can't use them to compare your FICO scores too.

[moondog7324]

First of all I want to applaud you for being so 'in tune' with the importance of good credit at a young age. The only advice I have is "MANAGE YOUR DEBT- NOT YOUR SCORE"

[Anonymous]

Since you are looking at October for the drop-off of that medical collection, I would start the HIPAA process now to get that removed sooner than later.  My score jumped over 50 points when my med collection was removed but the whole process took 90 days to affect my score.* 

Next in order of priority would be to pay either your remaining credit card or your auto loan off.  Maybe use the paydown rule to eliminate whichever one charges you the higest interest rate.  If you have high utilization on your auto loan that will keep your score down too (i.e. a 25K balance on a 30K car loan).

*My circumstances were different in that the collection was over 1K and had not been paid yet.  I got my insurance company to pay the original med provider and then followed the HIPPA process to the letter of the law and it was removed!

[Anonymous]

Sidewinder, yes, the balances are reported correcty. What you mention about credit age and bucketing makes sense. Equifax states the average credit history is 19 years, more than twice mine.

Moondog, I agree with what you say 100%. Unfortunately, the sad fact is that even though I literally have a perfect history of managing my money, the score is all that's going to matter when I apply for a new mortgage.

Alicias, I honestly don't know what the HIPAA process is that you refer too. I'm sure I could find it if I search, but if it will simply fall off in October then I'll just wait for that to happen. I don't plan on buying a new home until next Summer/Fall. I can pay off the CC, I'm saving the majority of my expendible cash for the downpayment on the next house, so the car payments will have to stay the same.

[Anonymous]

Sorry to resurrect this old thread, but my score finally changed. Capital One increased my rate from 7.9% to 17.9% on my 15K card for no reason. A card with such a high rate is completely useless to me so I paid it off and applied for and was approved for a 10K card with my credit union yesterday. I expected this would hurt my score a bit, but this morning I get a score watch notice that my score had changed and an inquiry had been run. When I logged in to check it, my score had actually gone up. The new line of credit doesn't show up on the report yet, nor does it reflect that the Capital One card had been paid off. The only logical explanation I can come up with is that only having 1 (5 in one day) inquiry was hurting my score. Any other explanations?