23 point drop?

[Anonymous]

I got an alert today and it says I lost 23 points. I don't understand what happened. This is the description.

DESCRIPTION Real Estate Mortgage Conventional Mortgage Variable/Adjustable Rate Account transferred or sold Closed or paid account / zero balance Variable/Adjustable rate

[Anonymous]

Looks like a loan account was sold, and closed as paid. Part of the Fico score is credit mix. Credit mix includes installment accounts. When an installment account is paid off, it is no longer included in that mix. Thus the score drops.

[Anonymous]

Will my scores recover after the new company reports? That just seems crazy that no fault of mine and my score drops.

[Anonymous]

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@Anonymous wrote:
Will my scores recover after the new company reports? That just seems crazy that no fault of mine and my score drops.

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Yes, but it will take some time. It will also depend on how the new company reports the loan. If it reports the balance as the amount loaned - in other words it looks like you haven't paid down any principle - it may initially hurt your score a bit.

[Anonymous]

Thanks for your response. Wow that's really disappointing. I also saw on CK my AAOA dropped by 1 year because of this. That makes no sense either.

[Revelate]

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@Anonymous wrote:
Thanks for your response. Wow that's really disappointing. I also saw on CK my AAOA dropped by 1 year because of this. That makes no sense either.

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And it should make no sense because CK has it wrong; that's a holdover from their original software implementation and they still promote age as "Average Age of Open Accounts" which has zero bearing on FICO, and doesn't on Vantage either to the best of our knowledge.

[Anonymous]

I didn't know that is what CK is reporting. Good to know. This situation make no sense to me and is very disappointing. This year has been hard on my score and this just makes it worse. In May my fico score for EQ was 798, then I got hit with a collection my insurance didn't pay. (They have now paid it) That dropped my score 62 points. Now this dropped it 23 points. I'm just hoping I get some up side soon.

[Anonymous]

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Mortgage-Servicing-Sold-and-16-18-point-h...

[Anonymous]

Exact same thing happened to me. The score does recover assuming the new lender reports the same. My score drop was even larger so it fits how the scoring works but we sure eat it on our end.