On 6-7-07 my score was 650 that same month Capital One raised mycredit limit from $300 to $1,800 (%18) as well as Washington Mutual approved me for an $8,000 card (%9). I have a secured loan for a boat and have never been late. There are two vehicle payoffs paid never late since 2003. Now 10-10-07 my score is 642. I thought I was doing great until I paid $200 on a $3,000 medical collection that was never on my credit but now is ( I was alerted today 10-11-07 of this new entry to my credit). I never thought apayment would have such a negative impact on my credit.
My question: Since I have all but this one huge medical bill and the others were paid between 20 and 65 days ago would it help to file a dispute withthe CA's in hopes of getting these collections updated to paid status any faster? It's now mid October and I had planned on making a vehicle purchase in December of $30,000 with about $8,000 down and am afraid that since my credit appears to be collapsing I'm going to either not get approved or get approved with a high interest rate. I have approximately $1,800 a month of disposable income. Normally I would wait on a vehicle but due to a manufacture change I am running out of time to buy this particular vehicle type.
WaMu- $8,000 limit with $5,200 balance
Cap One- $1,800 limit $1,000 balance
Vehicle 1 payoff 2003
Vehicle 2 payoff 7-2007
Boat - paying since 4-2006 never late
Truck to pull boat - on wish list
---------------------------
Bo
One should validate and negotiate before they pay.
call the collections agency and talk to them.
ask for no new dates at least. totally removal if you pay in full now.
you have enough money to do it. Once a person pays on a debt, they validate the debt themselves.
I would rather close cap one (had problems with reporting maxed out all the time) if it is over 1 year old.
get one if these credit cards instead.
they will not help until 1 year passes.
the interest rate difference from 650 - 620 is not more than 1% if you have 5000.00 down on most car loans. Do you have a credit union. sometimes all collections have to be paid with credit unions. Credit Unions provide very competitive rates.
Even though your score went down right now it will go back up soon if you keep good current credit going.
Tuesday, November 06, 2007
My credit score went down when I paid a collection
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The Fair Isaacs Score will penalize you for paying off or paying down a collection that was reported (see report date) more than one year ago.
If you pay down or pay off a collection reported 6 months to one year ago you get no points.
If you pay down or pay off a collection reported less than six months ago you will gain.
You will also gain on the first two scenarios at 6 months and one year.
Knowing the ranges of points in the scoring algorithm by section is important...many people are concerned with Inquiries...I have never seen a score reduced by more than 15 points even with 30 inquiries in 90 days.
Revolving balance issues can range up to 45 points. You lose 3 to 5 points if you go over 30% utilization on your account...5 to 8 above 50% and up to 30 points for over 80%.
A 30 day delinquency on a mortgage account can cost you 60 or more points while a new $2000 collection (providing there is already at least one collection on the file) may only hit you for 20 points...this is because when the score was developed using bureau archives, delinqencies on mortgages more frequently led to more serious total delinquency.
www.ohiocreditscoresolutions.com
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