Score dropped 46 points after bankruptcy removal

[Saleen099]

From a very good friend of mine. 

Can you provide an elaborate explanation regarding the rationale behind the significant diminution in my credit score, particularly in light of the removal of derogatory accounts and a public record, using a lexicon of sophisticated terminology?

[NoHardLimits]

To my knowledge, Creditwise (through Capital One) provides a VantageScore.  So, FICO algorithms don't apply. 

As to why a VantageScore went down, it could be a number of reasons.  Were the 4 removed accounts significantly older which may have lowered the age of oldest account and average age of account?  Did the removed accounts have higher credit limits which may have increased utilization ratios?  Were the removed accounts and public record the only negative marks on the profile?  Did anything else change with the profile recently?

[JoeRockhead]

Elaborate explanation, no. Sophisticated terminology, also no. Even though this is a Vantage 3.0 score, it should have generally still increased with the removal of the BK. Some possible explanations could be:

• Age of accounts/history has gone down significantly. 
• Limited credit history... short, and/or thin file would limit available data to show responsible use.
• Lack of credit mix 
• Recent credit seeking behavior

I'd have your friend check their EX Fico 8 score, at EX... and their EQ Fico 8 here are Fico.

ETA:

Very well, I acquiesce. Herein lies the refined rendition:

Notwithstanding the fact that this constitutes a Vantage 3.0 score, it ought to have characteristically augmented subsequent to the elimination of the BK. Several plausible elucidations may include: the age of accounts/history has diminished markedly; a restricted credit history—be it brief or insubstantial—would confine the available data to demonstrate prudent utilization; absence of a diversified credit portfolio; and recent inquiries for credit. I would recommend that your acquaintance verifies their EX Fico 8 score at EX... and their EQ Fico 8 herein pertains to Fico.

[Saleen099]

Update

He possessed five accounts bearing the notation “included in bankruptcy.” Following the removal of the bankruptcy status, these accounts were deleted from his credit profile; however, two accounts persisted, now categorized with the designation “unrated." 

[Thomas_Thumb]

Profile reassigned to thin file status? Also, loss of credit history due to removal of oldest accounts?

No clue what unrated means. Not factored into credit mix or history metrics?

[Horseshoez]

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@Saleen099 wrote:

Update

He possessed five accounts bearing the notation “included in bankruptcy.” Following the removal of the bankruptcy status, these accounts were deleted from his credit profile; however, two accounts persisted, now categorized with the designation “unrated." 

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The image you posted above is from CreditWise, which is not a FICO score (it is a Vantage 3.0 score), so basically it is irrelevant.  Go over to Experian.com and look up his true FICO 8; that should at least give you an idea of what is really going on.

[Pppoolboy]

Vantage score 3 is wacky and different from other scoring models because pretty much any time there's a major change in a credit report it carves a gigantic chunk of points out of the credit score for up to a month and then puts the points back in, plus some.

I believe this is why no lender uses Vantage score 3. It does wacky things and has major fluctuations.

For example every time I open a new account my Vantage score 3 takes a massive dump of about 25 points and then a few weeks later it returns those points. Fico might budge a few points.

Also, earlier this year I was added as an AU to a 40-year-old account. My FICO scores went up 5-10 points but my vantagescore 3 dropped 30 points and stayed there for about 3 weeks and then popped up 40 points.  This happened at all three bureaus so I believe it's a vantage score thing and not a bureau thing.

[MyAZLawyers]

Credit scores are calculated using several factors, and the removal of a bankruptcy can cause a significant shift in how those factors are weighted. While a bankruptcy is a major derogatory mark, its presence can overshadow other aspects of your credit profile, such as late payments or high balances. Once it’s removed, the scoring model recalibrates and gives more emphasis to the remaining elements of your credit report. If there are unresolved negative marks or high credit utilization, these may now play a larger role, which can explain the drop. Although counterintuitive, this is often a temporary setback, and focusing on building a solid payment history and reducing debt should help your score recover over time.