I need to understand why my score just plummeted 15 points (Credit Karma dropped 51!)
There was a change to the my report. Remarks were added to an account (Account Paid for less than full balance, paid charge off).
There is a bit of a story as to how we got the remark. So...melodramtics below (sorry for the long story, but I hope it doesnt deter responses)
This account (THD/Fortiva) was reporting a $750 balance that was past due. The account was charged off back in 2019, and the EQ report indicated that the account was a CO. I am in the process of cleaning up my credit, and wiping out any unpaid derogatory items. So, I called Fortiva to to pay it and found out that this account was sent to a collection agency (collection agency is not on my credit report). I called the collection agency to settle the account but found out that I had already paid/settled the account back in 2019. I must have settled it before the CA reported. So I called Fortiva on 3way with the collection agency to try to get Fortiva to update their information to show $0 balance. They blatantly refused to show that the account was settled, so I proceeded to initiate an online dispute through EQ. The dispute when through and Fortiva updated thier information to show the following: reduced the balance from $750 to $552 and showed a past due balance of $189. This information was wrong so I called EQ about these results and they suggested to fax another dispute. After faxing a new dispute I saw the change on my credit report back on 3/7/2022 showing a balance of $0, no past due balance, account status of charge-off....but no remarks. Also, no change to my EQ scores.
On today 3/19/2022 the remark was added (Account Paid for less than full balance, paid charge off). ALL of my EQ scores dropped. There was no other change to my EQ report. Can someone help me understand why the score drop? Is it because of this remark?
The other bureaus already have this remark so no score change there.
Starting Score: 611
Did the "date updated" field also change when the remarks were added? If so, this is likely the cause (not the remark itself). The more recent that date for a charge off account, the more recent the chargeoff appears to FICO - Often causing a drop in scores. This is why you'll see creditors and collection agencies update unpaid accounts regularly - to keep the negative "fresh" and scores suppressed.
The only good news is that the account is now reflecting paid/zero balance so no further updates should occur (so long as you don't initiate any new disputes)... this will allow the charge off to age and your scores to recover.
Sorry this happened - had Fortiva properly updated after the settlement in 2019, your scores would have recovered by now -- well, as much as they could recover from a chargeoff.
Thanks for the reply. This is highly frustrating to say the least. I wonder if it is possible to have Equifax modify the information to indicate that the account went to collection 3 years ago and was paid.
Its f-d up though, because I already paid the price for the collection when it happened - now I have to pay for it again because of the creditor's refusal to report the correct information. What are my rights in this situation? Could I get EQ to update the reporting on the file such that the scores are responding to the actual condition of my credit?
Something about this doesnt seem right. The date updated for my EQ report is this month, and the date updated for the other reports is last month. I disputed all 3 around the same time - all three have the remarks updated, along with balance, and date updated, etc. The only one that seeing a score drop is EQ. The funny thing is that the reports were all updated around 2 weeks ago (no score changes on any of them), and now this remark popped up on EQ yesterday. It wasnt until the remark popped up that the EQ score dropped. EQ must have placed something on my report that is creating the negative effect - not sure what it is though. I dont think its the "date updated" because the info was updated a couple of weeks ago, with no resulting score change.
@thornbackwas correct. This falls under dont dispute accurate info hoping to get it removed with the CRA's. It will come back verified and there goes some points. Different scenario same results. Sorry this happened. But at least it shows paid now for future creditors. So there is a bright side.
Thanks for the reply. Well, my hail mary will be to call and talk to someone about it. Theoretically, a collection going from "past due" to "paid" should yield a positive change in credit worthiness, so I think I have a case for complaint. Not sure what they'll be able to do, but it's worth trying.
It sucks that we are at the mercy of a clearly flawed algorithm. This is a glitch in the system that we shouldn't accept.
@Peterparkyr wrote:It sucks that we are at the mercy of a clearly flawed algorithm. This is a glitch in the system that we shouldn't accept.
This "flaw" has been corrected with FICO 9, which ignores paid collection tradelines. Of course, lenders are dragging their heels in the adoption of FICO 9 even more than they did with the intro of FICO 8.
As far as "acceptance", I look to the sanity serenity prayer for my guidance.
Thanks for the reply 👍
I'm going to wipe the tears away and prep for another 3 year wait....
Good thing is I'm doing other things to offset this l little setback and I still have a net positive gain since rebuilding. This forum is very helpful in this process, just to have a community to lean on... makes all the difference in being able to bear frustrations and convert [in]sanity to serenity 😊
Throwing this in to share my sadness
😐🙂😀😃😫
@Peterparkyr wrote:Thanks for the reply. Well, my hail mary will be to call and talk to someone about it. Theoretically, a collection going from "past due" to "paid" should yield a positive change in credit worthiness, so I think I have a case for complaint. Not sure what they'll be able to do, but it's worth trying.
It sucks that we are at the mercy of a clearly flawed algorithm. This is a glitch in the system that we shouldn't accept.
Dont let them try to file another dispute. It will do the same thing. Not as bad. CRA CSR's dont correct scores. Just info.
Understood. I'm going to try to have them hone in on whatever "code" or "indicator" was added that triggered the score drop. There's got to be something in there that they can see on their end. Hopefully I can convince them to eliminate it or change it. It might be the combination of "CO" and "CO Date" creating the effect of a new "CO". They have to be able to disassociate the "date updated" and the "CO Date". Will definitely avoid another dispute.
I realize it's a hail mary, but I do have a case for complaint. I'll keep the forum posted on the result of the call.
So I called EQ today to plead my case. No go. Here's what was explained by a supervisor at EQ:
They understand that the "date updated" (as originally suggested by @thornback ) is triggering the CO as a new collection. It is possible to dispute the "date updated" but it will have no effect. This is because the "date updated" is auto generated each time the creditor reports. It cannot be changed or altered by any party. If disputed, it will only generate a new "date updated".
They agreed that this is triggering an incorrect result. The only thing that can be done is to convince Fortiva to delete the file. There is no other way to create the positive result that should exist.
I am pondering if it's worth trying to have it deleted. It falls off in 3.5 years. I do have to buy a car in 2 years, but no other major credit purchases. Is it worth it? I'm leaning, "no", but if someone thinks otherwise I'd be happy to hear the case.
Thanks all that replied above!