What Lowered My Score?
In a recent routine check of my credit report I found that Experian was showing an old closed acct as a charge off. I called and sent cert letters to both telling them to correct it. (This acct has been closed for 10 yrs and never showed as a charge off before. Plus only Experian was reporting it this way.)
It has since been corrected. No problem. Right? Wrong. When the charge off was showing on my report I had a score of 690. Tonight(10 days later) when I checked my score sans the c/o it is 667. What happened? :-?
Did they correct it or remove it? If they removed it that may have caused your score to drop. There are many other factors that influence your credit score including available balance on accounts, credit limit of accounts, number of accounts, length of time you have had credit and so on and so forth. Unfortunately, the bureaus won't release their exact algorithm. Credit scores normally fluctuate on a daily basis. Tell a little more about your report and any other possible changes and I can give you some more advice.
Sincerely,
Mario Costanz
It is not being reported at all anymore.
It was never a charge off but was a paid in full closed revolving account.
There have been no new inquiries, accounts or even use of credit for over 90 days. I have had no lates, ever. Before I understood a little about how scoring worked I did a couple of dumb things thinking I was doing the right thing:
I closed a few accounts I had for many years because I was not using them. Also, I refused credit increases on revolving accounts. At the time I thought "why get increases if I do not need them?" I did not use CC's much for many years. Since I bought my home 2 yrs ago that has changed and I am now at the high end of my card limits so I know that is hurting my score. I have a 30% DTI.
thanks for your advice.
Really old closed CO accounts give you more points with age than they take away with negative status. However, they will act as stumbling blocks to new approvals, so you're better off without 'em if you can't get 'em corrected. If I were you though I would still complain that the account was deleted rather than corrected.
linlaughed,
Your score most likely went down because you lost the age that came with that account that they deleted. I agree with flacorps that you should contact the credit bureau or creditor and demand that they put the account back on your report and make sure that they put it back as "paid as agreed"
flacorps,
You said "Really old closed Charge Off accounts give you more points with age than they take away with negative status." That is not always necessarily true. It depends on what is on the rest of the report and if that is the only account from that time period. The algorithm that determines your score looks at the total picture and does not set a static amount to any type of account. An old charge off may be helping someone who has no other old accounts, but it could be hurting a person who has no other derogatory information on their report but has other old accounts. That goes especially if it is the only derogatory account. In our removal process, when we start getting accounts removed for our clients, their scores gradually go up. When the last account is removed, we get the biggest jump (sometimes over 100 points).
Sincerely,
Mario Costanz
Being a mortgage broker, I've looked at literally thousands of credit reports and I can tell you that many times they do not make sense. I've had people that can't make a payment on time have a 650 score and someone who has never been late have a 580 score. I've seen peoples credit drop by 60 or more points in a month with no new info on their report. A lot of it just doesn't make sense.
As a loan officer, we took a course on credit reporting, and what was told to us was that when there's any activity on your credit report, it has a direct effect on you. So for example, what you asked them to correct or change will initially drop your score because of that change, and then it will bring it back up. Credit reporting is so interesting right now, because, like the mortgage broker said, it differs in every case. Sometimes they tinker with the criteria on the credit reports, and months later it becomes rigid again. Although you had that as a charge off on your credit , it was not affecting it at all, so it could have been left alone. At this point, let them change it to paid in full and let your credit rest for a bit. You'll see it come back up.
Thank you all for your input.
osemeneb,
you said "So for example, what you asked them to correct or change will initially drop your score because of that change, and then it will bring it back up. " That is not true. While it is sometimes true, it is not a good idea to make generalizations like that. Actually in most cases when you remove a derogatory account, your score will go up. Obviously there are exceptions to this rule (like linlaughed's case). It is best to consult with a professional who knows the industry before making any significant changes to your credit report.
Sincerely,
Mario Costanz