Welcome to the forums! Depends on your file, and also what scores you are looking at.
Where are you getting your scores from? There are large differences between FICO and say Vantage (or worse utterly educational score).
When talking FICO, without getting extremely detailed, we are assigned based on elements of our credit file into a scorecard: scorecard segmentation as it’s known.
In some cases, usually files with limited positive history and aged negatives, the deletion of the negatives shifts them to a higher scorecard; however, scorecard scoring ranges do overlap and as a result you might not do as well in the new scorecard and wind up with a lower score.
That all said positive history is the easier of the two to come by, just have several accounts open and never miss or be late or pay less than the minimum on any payment... and as a result getting any negative deleted is a win as it is on the road to much higher scores than one can achieve with the negatives.
Where are you getting your scores from? There are large differences between FICO and say Vantage (or worse utterly educational score).
When talking FICO, without getting extremely detailed, we are assigned based on elements of our credit file into a scorecard: scorecard segmentation as it’s known.
In some cases, usually files with limited positive history and aged negatives, the deletion of the negatives shifts them to a higher scorecard; however, scorecard scoring ranges do overlap and as a result you might not do as well in the new scorecard and wind up with a lower score.
That all said positive history is the easier of the two to come by, just have several accounts open and never miss or be late or pay less than the minimum on any payment... and as a result getting any negative deleted is a win as it is on the road to much higher scores than one can achieve with the negatives.
@Anonymous wrote:
I need help understanding why my score is dropping once a few collections have been deleted and my utilization has gone from above 30% to around 5%. Please keep in mind that I am new to the forum and I am trying to rebuild my credit. I am reading and trying to take in all the advice to raise my score. The overall balance decrease and collections being removed have dropped my score by more than 14 points. Is this normal?
1. Welcome.
2. Neither a balance decrease, nor removal of a collection, would cause a drop in score; each would only cause an increase in score.
3. If the accounts with the collections were deleted, that could cause a score drop by removing older accounts.
@Anonymous wrote:
Thank you for your reply but I'm confused. The Myfico alerts state that the total balance of my collection accounts have decreased by $X dollars and shows the decrease in points in red. There are also notations that collection accounts, delinquency and past due accounts were removed from my reports. All of them have point decreases in red beside the notes. There is also one that states that the balance on an account has decreased. I thought all of this would benefit me, but it reduced my scores. Is this a temporary drop?
MyFICO alerts don't provide reasons for a score change. There are certain events which trigger MyFICO alerts.
If there happens to be any difference between your present score at that particular bureau and the previous score reported to you from that bureau, the score change is tacked on to the alert. There is not necessarily any connection at all between the score change and the alert substance.
Also, as I mentioned earlier, the removal of older accounts -- even accounts with negatives -- can negatively impact your scores.