Collections removed but no score increase

[Anonymous]

I had 2 negitave items removed from my credit report totaling about $3,600. One which was recently place on there. Transunion deleted them but there was no increase. I have 3 collection accounts on my report totalling about $2,500. But I figured with a large amout being removed it should at least have a slight increase. They were deleted April 10th but still no change. Will it eventually increase?

[Revelate]

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@Anonymous wrote:
I had 2 negitave items removed from my credit report totaling about $3,600. One which was recently place on there. Transunion deleted them but there was no increase. I have 3 collection accounts on my report totalling about $2,500. But I figured with a large amout being removed it should at least have a slight increase. They were deleted April 10th but still no change. Will it eventually increase?

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Unfortunately not really; with the way FICO works there's diminishing returns to any positive or negative.

In this case if you have say 5 collections, getting 2 off may not be any increase at all... and until you get that last one off there isn't a OMG AWESOME SCORE INCREASE! type benefit unfortunately.  On the flipside, if you have 3 collections and you tack on 2 more to get to 5, you might not get any change either.  The first of an anything counts the most for FICO, the second less so, third less than that, and outside of the utilization metrics pretty much everything else works like that positive or negative.

In my case I had a collection and a tax lien and I gained 5 points for the collection's coming off: not terrible, but I can't get excited much about anything less than 20 points variance.

End of the day getting rid of any negative information is a huge win, but the biggest benefit from a FICO perspective doesn't come until all the negative information is off the report.

[Anonymous]

Even though it was almost $4000 removed?

[Anonymous]

I had previous items removed and it jumped at least 16 points. For some reason it didn't increase with the last 2 removals.

[Revelate]

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@Anonymous wrote:
Even though it was almost $4000 removed?

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Yup, the amount doesn't matter from FICO's perspective (well, if it's <$100 it's discounted under FICO 8, and if iti's paid it's discounted under FICO 9) but beyond that FICO doesn't care.

Lenders care very much indeed though about open / closed and amount and probably number of collections, FICO isn't the only portion going into an underwriting decision and likely will never be for any lender.

[Anonymous]

I actually just checked my score again and 4 items were removed and I only owe 3 with transunion totalling $2200 and 3 were removed with equafax and I only owe $330... Hopefully there will be a slight increase.

[Revelate]

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@Anonymous wrote:
I actually just checked my score again and 4 items were removed and I only owe 3 with transunion totalling $2200 and 3 were removed with equafax and I only owe $330... Hopefully there will be a slight increase.

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Maybe, getting that amount of derogatories removed is a huge win anyway in my opinion regardless of what the scores do, congrats!

[Anonymous]

Thank you... Hopefully they do increase because we're looking to buy a home.

[Anonymous]

Good feedback from Revelate above.  As he pointed out, the dollar amount of the collection removal isn't factored into FICO scoring.  Removing a $5000 collection verses a $500 collection doesn't make a difference.  They are each seen as a major derogatory item, so in the eyes of FICO you are simply removing 1 major derog.  The amount of other major derogs you have will impact how much your score changes, if at all.

One positive in getting derogs removed, though, is that with less derogs you have a cleaner report which under a manual review always looks better.  If you're trying to get another collection removed, if they see that they are your only collection or that you have 1 other one they may look at you more favorably than someone that has 5 or 6 collections.  This could influence their opinion on potential removal, as while these two individuals may possess similar scores (all other things being equal aside from number of collections) a human being looking at their credit reports may be able to deem the one with fewer collections to possess greater creditworthiness.

[Anonymous]

Thank you for explaining. I have one additional question. Once something is removed/deleted can it be added back to your report?