Score Continuing to Drop Despite Paying Off Debt!!! (Update Score Going Up!!!)

[MarineVietVet]

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@daylove wrote:

Paying off collection change the date on them making them current and as a consequence your score drops,

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This doesn't apply to collections. I have been guilty in the past of spreading this in error.

Collections are scored off the date of assignment, not the DOLA. A change in DOLA shouldn't affect the score. .

This is such a common belief that we're trying to find examples with before-and-after reports where it happened, in order to see what's going on. If either the CA or the CRA is handling the data incorrectly, it needs to be corrected.

Here's a thread discussing this: Settle or Pay in Full?

Again, I'm not saying that it doesn't happen, but it's not supposed to, if the CA is reporting correctly and if the CRA is putting the info into the correct data fields.

I have begun to try and undo some of the harm I've done in the past by giving out incorrect information about collections.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[Anonymous]

I know exactly why your score dropped.  You said you paid off some old delinquencies. ..... BINGO!!!!  Ah something the FICO and Credit Reporting agencies don't want you to know!!!  Paying off old delinquencies trashes your score.  I got some really bad advise and paid off 2 four year old charge offs with no other changes.  My FICO score dropped 60 points!!!!  Unless your creditors are willing to remove the trade lines in exchange for a settlement paying off old debt will trash your score!

[daylove]

My friend was about to buy a house he had the minimum score and had the "brilliant ideas" to pay couple of collections and his score went down the drain and was not approved for the mortgage. The bank told him he made a mistake paying the collections.

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@MarineVietVet wrote:

---

@daylove wrote:

Paying off collection change the date on them making them current and as a consequence your score drops,

---

This doesn't apply to collections. I have been guilty in the past of spreading this in error.

Collections are scored off the date of assignment, not the DOLA. A change in DOLA shouldn't affect the score. .

This is such a common belief that we're trying to find examples with before-and-after reports where it happened, in order to see what's going on. If either the CA or the CRA is handling the data incorrectly, it needs to be corrected.

Here's a thread discussing this: Settle or Pay in Full?

Again, I'm not saying that it doesn't happen, but it's not supposed to, if the CA is reporting correctly and if the CRA is putting the info into the correct data fields.

I have begun to try and undo some of the harm I've done in the past by giving out incorrect information about collections.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

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[MattieNumNums]

Sounds like paying my debt off was a big mistake. Should have just letted it rot away.

Nothing I can do now. I paid off about $10,000 dollars in debt. I now have no debt, minus a car which is paid off in 10 months, and a 20 year student loan with almost no intrests and small monthly payments. Equifax's dispute center has been unavailable the last week so I can't do any disputes but I went through my Transunion and disputed stuff again and requested a current informaiton pull, as well as requesting some records be removed that are within 12 months of being deleted. Lets see what happens. It appears that my Transunion can go up to the mid to high 600's while my Equifax will remain in the mid 500's. So far Equifax has been a pain in the butt to deal with.

[MarineVietVet]

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@daylove wrote:

My friend was about to buy a house he had the minimum score and had the "brilliant ideas" to pay couple of collections and his score went down the drain and was not approved for the mortgage. The bank told him he made a mistake paying the collections.

 

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Then it was either the CA or the CRA that was at fault. What I posted is from a very reliable source here at myFICO. I will say again that collections are scored from the date of assigment and not DoLA. Paying off a collection shouldn't affect your score. I'm not saying it won't but it's not supposed to.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[MattieNumNums]

So i went though and disputed to have all my credit records updated since part of my reconsolidation was them removing all negative records. My score jumped to 615 today. Much better. I would love to see it at 620+ though!

[MattieNumNums]

So I went into a car dealership yesterday to get some prices and ended up walking out with them telling me they can work me out a sweet leasing deal. Ill find out today if everything is all good. They told my my credit wasn't that bad. My Experian score was 622.

[MattieNumNums]

Got the car. Was able to qualify for a Honda Lease. I can't believe it! The guy said paying off my trade in plus the new lease will bump my credit score up immensly.

[haulingthescoreup]

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@MattieNumNums wrote:

Got the car. Was able to qualify for a Honda Lease. I can't believe it! The guy said paying off my trade in plus the new lease will bump my credit score up immensly.

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It will help over the long run.

[MattieNumNums]

I feel great about this because my car payment is only 1 year long and 45 dollars a month more. My company gave me the money for the down payment so I ended up getting a brand new Hybrid and traded in my gas guzzling sports car.

On another 2/3 of my student loans dropped and my scored rocketted to 638. Things are really looking up! I am hoping that my paid off car and new lease will help get me to my next goal of 660.