I still don't believe it. In November when I started to clean up my credit I had a CH13 Bankruptcy completed 18 months earlier and 42 derogs and 7 non-derogs in my credit file. My Credit Line utilization was 95%. One of the derogs was a recent CA posting. FICO was 620. All derogs and the BK are scheduled to come off by the end of 2004. I now have only 8 derogs (all over 3 years old), the same 7 non-derogs, credit utilization is down to 85% (most of that is a 2nd mortgage, for some reason the 1st mortgage is not in my credit file), no new inquiries, no new derogs, the CA is gone (it wasn't mine) and my FICO is 577. At this rate, when all the derogs and the BK are gone in 2 years my FICO will be 325!!!! What gives???
Of those 42 derogs, were any of them long time accounts? I experienced, despite the derog, that the age of the account outweighed it for some reason. Maybe your file looks younger now?
Most here agree that when it comes to negative tradelines scores only start to improve when the last one or two of a particular kind of derog comes off. FICO seems to operate on a curve. If every collection counted against your score, it would be possible to have scores below -0. By removing the derogatory accounts you inadvertantly destroyed whatever positive influence was counter weighing the negative impact of the derogs. Since FICO has so many variables used in its scoring model, it would be impossible to say which one caused it. I have also heard rumors of FICO using scorecards. Consumers are placed into diffrent groups called scorecards and each derog is assigned a diffrent weight depending on what scorecard your in. This could explain why some individuals see an immediate drop whenever items are removed, but they end up rebounding within a month. Pehaps they get assigned into a new group whenever the CRA's computer updates. Until some hacker steals FICO's software and posts it on the internet, we may never know.
I think a lot of this effect comes from the "average age of accounts" - obviously a bad way to gauge a consumer's creditworthiness. As you move further away from negative entries, and they drop off (forget disputing them off) the average age of accounts drops because the number of long-standing accounts drops. Silliness in the FICO RNG.
So let me get this straight - a credit file with 40 derogs and a bankruptcy, as long as the derogs are old accounts, is better than a credit file with 2 positives only???? Makes me want to go out and file BK again just to improve my FICO.
25+ years "PERFECT" credit...(NO "BADDIES" EVER) I owe "TONS" less now with 675...than I did with 739!!! SOMETHING IS WRONG WITH THAT PICTURE!!!
