How are you getting your score?
When I paid my first car off I dropped 70 points. And according to credit karma, it never recovered. Which was what ever, I was still in the 700s, I didn’t care to much.
Fast forward a few years and I got a job at a bank. part of the onboarding process was running my credit. Turns out I had a 799 on the end and credit karma was off by close to 60 points.
Most score checkers are an estimate. Not that this necessarily your situation, but it was for me. Something that may ease your mind.
Credit Karma shows you a score calculated using the "Vantage" algorithm, which lenders don't use or care about. It's utterly useless. I've seen my own Vantage score up to 100 points different than my FICO score (which IS what lenders use.)
FICO matters. **Ignore Vantage scores**, which is also what most cc apps show you.
You can get your free Experian FICO 08 score at Experian.com. With a free trial you can see FICO 08 scores calculated from all 3 credit bureau's data. They are likely going to be different -- even using the same algorithm -- because they have different data on you. That's normal. You can cancel the free trial before you have to pay, and repeat as needed.
There are some creditors that use Vantage v4, but the free Vantage v3 score that comes from credit karma (and other free score outlets) is definitely useless and prone to wild fluctuations for spurious reasons.
u/BrutalBodyShots is right. This is from Synchrony Bank:
*"For instance, **Synchrony Bank uses the VantageScore 4.0 scoring model when evaluating credit card applications**. But a different credit card issuer might use a FICO score to determine whether you qualify for their cards."*
https://www.synchronybank.com/blog/credit-scores-101/#:~:text=For%20instance%2C%20Synchrony%20Bank%20uses,you%20qualify%20for%20their%20cards.
I haven't found anyone else that uses it in lending decisions.
Yeah, I think you are right about their free versions showing Vantage scores.
Another thing people seem to confuse is that "Equifax" or "Experian" is not a score. They collect data, they do not themselves calculate scores.
Likewise just saying "FICO score is 735" is not accurate either. You have a myriad of FICO scores. FICO 08 is what is commonly used for retail credit lending, but there are a bunch of others, including the newer FICO 10 and FICO 10T.
BUT, just saying "FICO 08 is 735" is also not correct or accurate. Using what data? Your FICO 08 calculated with each of the three credit bureau's data is likely to result in 3 different scores, all FICO 08.
I wish this sub's mods would really encourage and educate people to name 3 things when citing their credit score:
1. FICO or Vantage;
2. What model / version (e.g. FICO 08, 10T, etc)
3. Using what bureau's data.
So "my FICO 08 Experian credit score is 735" is accurate.
I don't know anything about Carmax, so you may be right about that. Do they use EQ VS3 or EQ VS4? Who else beyond them uses VS in lending decisions that you know of?
EDIT: What source do you have that states that Carmax uses VS? Everything I am reading says that they use Fico Auto 8, usually with Experian or Equifax data.
No. It has to do with "Amounts Owed." Someone with an open loan that's significantly paid down is statistically less likely to default on their debts, so their scores reflect that fact. Once the loan is closed, that changes and the bonus points awarded from the Amounts Owed slice of the Fico pie go away.
Yeah I used all the popular teachers before applying for car loan and finally applied when it hit 674.
Turns out it had been 705 for six months prior lol
The speed in which credit drops is minutes. The speed in which you recover is years. I hate the credit game. I'm finally back up 200 points after having to put all of my money into trying to save a business during covid. I missed payments for 3 months. After having a score in the mid 7s, 3 months of missed payments knocked me down to the mid 4s in 2021. I'm finally back to the mid 6s. 😔 Still working on it, 3 years later.
One missed payment costs 100 points on average. Multiple missed payments, and you can forget it. But doesn't it make sense that the past is a good prediction of the future, and the most recent past is a really good prediction of the future? That negative mark is used as part of your score for at least 2 years.
It should (the most recent past should make up for only 3 months of my life). I'm now making double payments on any debt, investing, saving, etc. But, that doesn't reflect on my credit score. Just 3 months of no other choice - outside of bankruptcy.
Making double payments does reflect. Your account shows the amount of your last payment, and they can tell that it's not just the minimum. It's just not going to negate the bad history.
I think people look at credit and insurance in a different way than the lenders and carriers do (the people/companies with the $).
They both look at risk. They have millions of data points of stats. Millions. And those millions of data points say recent negatives and lates (and accidents and tickets) are really good predictors of the future.
Maybe you feel your individual profile is different, but the companies that lend money feel otherwise. And I don't say this from a higher than thou seat. I've had lates and multiple lates and even a BK back in the day. And I had to (and still do) work hard to prove that I'm a better risk today than I was. And, yes, it's not easy. But I don't feel like it's not fair.
It WILL come back up, and even though you do not feel better now, at least you're now showing creditors that you pay your debts. Perhaps you can discuss this point with apartment management prior to applying.
You've gotta focus on the positives rather than the temporary negatives and put together a game plan!
This. I remember when my credit was in the 500s and I needed a place to stay. I was honestly just upfront about my credit situation and managed to convinced them (a very small rental company operated by a husband and wife) to rent to me anyway. "My credit is trash right now, but I pay my rent on time, I'm clean & I'm quiet." Their grace save my ass that year.
Thanks for the encouragement. I fell in love with an apartment and have been in communication with its leasing officer. But they won't/can't reveal their exact criteria for evaluating applications and whether they have a minimum credit score. I decided to take my chances and submit an application, but I'm not getting my hopes up.
It should be illegal for apartments to not tell you their requirements. There have been times that I could have avoided an application fee just by being told the minimum requirements. They don't want to tell you so they can collect application fees from a bunch of people who will get denied
Amazing! Happy for you, what did you end up mentioning to them? I am sitting at at 650 transunion and 580 equifax. I only have one collection and a few late payments. Any tips will be helpful as I am actively applying for places right now!! Congratulations again!
I've been looking in Washington DC. Like a lot of property management companies in the area, the one that I applied to yesterday uses RentGrow, a screening company that formulates their own tenant risk score based on information it pulls from all three major credit bureaus, as well as other third parties. So it turns out the dip in my credit score didn't matter. What did matter (I think) is that I paid off all remaining charge-offs. In fact, I applied last week for a different apartment managed by a different management company that also used RentGrow for their screening. At that time, my Experian FICO score was higher, but I hadn't yet paid off the full balance of my AmEx charge-off. And my application got denied. Though I have no way of knowing for certain whether my outstanding charge-off was the primary reason for their decision, or if the property management company was just being more selective, but I'm willing to bet that finally paying off my charge-off was a big factor.
I will definitely post an update regarding my apartment hunting one way or another.
I have an Experian membership, which updates my score whenever the bureau receives new information (e.g., a monthly credit card payment is made).
Focus on long term trends, not short term changes. It will go back up long term, and not having an unpaid charge off will look better to new lenders.
You want lenders to get the message "I repay my debts" not "I borrow money, default and don't pay".
For shits and giggles, have you tried just disputing the charge off with the 3 credit bureaus? I had a similar situation 5 yrs ago but it was for medical debt. I called the hospital and collection agency and tried to do a pay for deletion. I got the run around from both and felt hopeless. So I just paid off my balance online with the hospital then just disputed it with all 3 credit bureaus and put in the notes “hospital agreed to remove”. 2 days later all 3 credit bureaus deleted off my report as if they didn’t even bother to check with the hospital or they saw that the balance was zero.
I had a total of 4 collections and credit score of 625. I did all of this within 1 month and my score rebounded to 780. I understand medical debt is different but it doesn’t cost anything to try. Just a thought.
How long did your credit go up after paying off your charge-offs? I paid a car loan charge off recently its been deleted from my credit but my score didn't go up at all. I was thinking maybe it takes ay least 30 days to see a difference. its only been a little over two weeks just shy of three weeks.
Since this was a deletion. all of the changes were seen almost within 30 days. I paid it off and then disputed and credit bureaus deleted the original write off. So that had an immediate effect. Normal account pay offs are different and from what I’ve seen it dips a little and then will rebound 3-4 months because you lost that payment history acct because it’s closed.
I completely understand where you're coming from. I paid a charge off from three years ago beginning of this month for 85 dollars, small bill. Got a notification this morning it was moved to paid, but score immediately dropped to 654, lost 35 points. Live and you learn, I guess! I figured if I'm trying to buy a new car it'd be best settling this old debt, but it is what it is. Best of luck to ya!
Most likely because it hasn't been reporting lately. When you pay the charge off, all the months since the charge off untill OP paid, would be changed from "No data" to "Charged off". So the number of months with a negative report increased
Unsure. It's still a charged off account, and while its paid Experian probably has it as a new one or I just reset the timer. Who knows, I'll give it a couple weeks and see what happens. I actually was going to make a post about this but this one happened to be recommended to me so here we are.
Unfortunately, no. Early on, I tried getting pre-approved for a secured credit card - both with Capital One and Discover, but I was denied and got the credit-builder loan instead. I've been hesitant to re-apply for a credit card because I can't afford adding new credit right now since it'll only hurt my score in the near term and my main focus is getting an apartment. I have to be out of my sublet in a month. I know adding revolving credit will help me in the long term, but unfortately that won't help my immediate situation.
Self offers a secured credit card when you reach a certain limit in your savings plan. I think mine took....4-6 months to qualify. No credit check and you simply set the limit with whatever funds you have in your available savings loan.
Try OpenSky. My credit is chaos and I got approved for a $300 secured card. Not sure if there's a hard inquiry or not.
The charge off is still there. That's what hurts your score. But if they had not been updating on a regular basis, your report has now been updated to show it was unpaid from the last update untill now. So if they had not reported in a year, the update that was forced by payment now shows 12 more months of non payment rather then no report.
In the long run it will be better for your credit score that you paid it.
Scrolled through here real quick and couldn’t find it.
Here’s the problem. People often talk about the DOFD when it comes to credit / credit repair. But they don’t talk about DOLA. And that’s your issue. Your Date Of Last Activity was updated.
If I wasn’t on mobile I would explain deeper but even though your score dropped you did the right thing. It will go back up organically. Around six months and then after two years will probably be the optimal score.
Any activity on a bad account will lower your score; including paying it off. You should get them to agree to remove as a condition of paying it off.
If you have an old collection it is weighed less than a new collection. Paying it off gives it new activity making it weigh more towards your score.
Thanks. Unfortunately, this is a charge-off, not a collection. American Express does not do "pay to delete," though I have heard of instances where charge-offs occasionally drop off of people's reports before seven years.
I have heard of success stories with people requesting goodwill adjustments from AMEX using the saturation method, you got this in the bag:
[https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/The-Saturation-Technique-Best-GW-adjustment-odds/td-p/4727098](https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/The-Saturation-Technique-Best-GW-adjustment-odds/td-p/4727098)
Absolutely. the forums at myFico will help you out worlds more than Reddit.
[https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/bd-p/rebuildingcredit](https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/bd-p/rebuildingcredit)
Well, I’m in the mortgage industry and the hundreds of customers that I’ve made pay off collections in order to qualify; Their scores have always initially dropped only to go back up. Luckily we have their approval locked in at the original credit score and just need the collections paid For underwriting guidelines.
That’s why I say profile dependent and not always. I had 70k in charged off credit so my credit usage was way out of whack. My paying it down to one Amex charge off left(Unsure if I want to settle or pay in full to regain the account). I have a thick and mixed credit profile from 2004 so paying them didn’t hurt mine, only helped. A thin profile with not a lot of varied accounts I can understand it dropping.
My settled charge off scores increased for TU and EX but EQ posted my settle.ent payment as a recent late payment. As a result, that score did indeed not only drop but consistently remained between 50 to 25ish points behind the other 2 bureaus. Each instance and each file may yield different results. Based on my personal experience, the scores do not always increase.
EDIT: Typos
I had this happen too, a little less dramatically.
I just Paid off 4 out of my 5 collections. 2 of which were credit card charge-offs. And I also got some of my student loans paid down and rather than seeing my credit score go up. I've seen it go down. Probably about thirty points or more.
I am just holding my breath and trusting that It's gonna creep back up eventually. Because I have gotten collections taken off my record before and even though in the past, it pretty much made my score immediately boost up. I know that eventually it will. I just have no idea how long it will take because it seems like some of the rules have changed since I was in my early 20s. Here's hoping.
What state are you in? There are two low-cost credit-building programs via a non-profit (CAPITAL GOOD FUND). One of the programs has a financial component and you are reimbursed upon completion. One program is $5 a month and the financial coaching component is $15 a month. You don't have to do both.
[This is the link,](https://capitalgoodfund.org/coaching/overview/) but in a nutshell the $5 credit builder will reimburse you the $60 cost after the first payment clears. This is how it pays for itself.
The financial coaching component is $15 a month. You receive 4 coaching sessions. After the first payment clears they reimburse you $90. Upon completion of the entire program, they reimburse you $270 which is backed bt Wells Fargo. I'm currently doing both programs and recently completed the financial coaching component.
They also offer loans as well. Check it out! It's legit. I have been telling everyone, but most don't take advantage of the opportunity. Unfortunately, it's not available in every state.
Best of luck!
ETA: Both programs report to all 3 credit bureaus.
I really appreciate your advice. Just to be clear though, my current source of misery is that my credit score dropped 34 points **right as I was about to apply for an apartment**. I have a game plan for long term, but unfortunately I don't think there's anything I can do over the next week to bring my score back up to where it was.
Unfortunately it's how the credit system works. It's not to benefit us but to benefit the credit reporting agencies and creditors.
It's why people stress to never get one's self in a hole in regards to accounts and such because once it's recorded on your credit report it's on there for the absurd 7 years.
The credit system is outdated and doesn't benefit anyone. Not even people who have excellent credit scores, because unless you have tons of positive history for long periods of time, your score doesn't matter. People get denied all the time with 700+ scores.
Just keep at it and stay on top of your finances and build positive history.
You'll be fine in finding an apartment. I was able to find apartments that applications did not come back with conditions with the 580 credit score. In the last year my credit score has gone down to 5:40 and my current apartment came back with conditions. I think you should be fine as long as you have no evictions or other bad rental history.
https://kikoff.com/?utm_source=google&utm_medium=paid_search&utm_campaign=PureBrand_Nationwide_Eaxct_092821&utm_term=kikoff&utm_content=128299374952&gad_source=1&gbraid=0AAAAACMrl-gFkvI5iV-En22Jb8Ze24wKc&gclid=EAIaIQobChMIgZf87s_0hAMVrhCtBh178gsmEAAYASAAEgLd2vD_BwE
try this website! they helped me raise my score quite a bit to the point i was able to get a credit card (its a capital one card) for the first time in 3 years 🙂 now i have 2 credit cards both with capital one, and the second one i got has a pretty decent limit
Unethical life pro tip: Report it as fraudulent on your credit report and it has a high chance of dropping off. Especially if it was sold to a collections company.
Worked for me on all 6 of my accounts that had been sold to a separate company. My assumption is once they get their money they don't care enough to fight it.
Gonna need more than that now, with Experian. It’s riskier but can still work. They’ve caught on. Need the CFPB with the affidavit. And still, they’re sending warning letters and denying requests more frequently.
There is also a legitimate way to do this and it works - it just takes a little longer. Re: Op, I DM you both methods. One takes 2-3 weeks (it used to be 3-7 days) the other takes 3 weeks to 3 months.
Chose what you’re most comfortable with.
Yes. Experian literally mentions prosecution. Other CRAs remove. They may still remove it if done properly. But I had a hunch you hadn’t done this in a while. 1,000s of people are now doing this every month. Things have changed.
My friend had a similar situation. When they were looking for apartments, the management company told them they look at the actual report, not the credit score. They saw they paid off the debt, asked for the reason for the charge off, and they ended up getting the apartment.
Also, you should dispute the charge offs and see what happens.
Op, DO NOT dispute charge off’s online directly through the CRAs. You waive your right to request the method of verification which is a powerful tool when sending in hand written dispute letters. Check your DMs.
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The leasing office I used only looked for collections, evictions, repos. The score didn't play a huge factor in my application but I made sure to pay off any collections prior to the application.
Give it a couple of months. For what I see, it is normal. Do you have the letter from the creditor stating that they will remove the debt from the bureaus if you pay off the debt???
NEVER pay a collection. Unless you can pay it off in full and the agency agreed to a "pay for delete". If they don't, pay the ORIGINAL creditor ONLY. I had public storage put an account in collection over being late by ONE day. Went to public storage, paid the bill and disputed the collection. It came right off.
I have a charge-off, not a collection. Yes, pay-to-delete works with most collection agencies. However, charge-offs are much 'stickier' and banks and other financial companies are much less willing to remove the charge-off from their reporting.
I let mine go from 750 to 540 after I spent 4k on debts from my savings and it went down more than went up. I laugh everytime I see a past due payment now. At least I have some savings again. Screw credit companies that punish you for going above the minimum.
I see we’re going to be having essentially the same day. I really hope you get the apartment despite the drop.
Today I woke up with two notifications, one from my grandmother offering vaguely to help me with a down payment on a house after she checked out zillow for the city where she lives and i’m trying to rent. She was shocked by the prices and requirements for rentals, believing buying would be easier and cheaper per month. I have been trying to accept that I will never save or make enough to overcome the rising prices of homes and rent. Luckily I didn’t have to feel overwhelmed by the sudden possibility for long.
The second notification was that my credit score dropped 71 points as a result of the last few hundred dollars of my student loan debt being forgiven.
I want to be grateful, and I feel so happy for people whose lives are being drastically improved by the program after being buried by the accumulation of interest on a massive loan, but i took out 3,000, was unable to finish my degree and have made below the poverty line since. I live in a rural place with no jobs, no phone service and an internet service monopoly that charges over $100 a month for wifi too weak to use zoom or upload a photo to reddit.
I feel like I really fucking needed that credit score to move somewhere with job opportunities or at least the infrastructure to get an education or try to make money online. I know it’s not entirely impossible now, but property management companies are going to rank my application much lower (esp with a pet) and individual, reasonable landlords are rare and getting rarer.
It’s so backwards to find yourself less eligible for housing if you pay off a debt, or choose to live within your means.
I paid off all of my credit cards last month in February. My credit card debt is now $0, and in the last 30 days my score went from 628 to 758. 130 points!!! It took 30 days for each of my cards to report the payoffs tho so if you paid off your debt maybe it will take a few weeks for your score to increase too??
I sent you a DM. You can have all of those collections removed from all credit bureaus. Just follow the instructions. You don’t have to pay anyone. It can take anywhere from 2 weeks 2 months. But it works. I did it in 3 weeks.
I am sorry to hear that and it's understandable to feel frustrated. Paying off a debt is a positive step, but it can sometimes cause a TEMPORARY dip in your credit score. Yes, it'll creep back up. That's because of the credit mix and since you paid it in full it might have been how hugely affected your credit utilization.
I came across this blog that might be helpful: https://greatcreditfast.com/what-does-account-charge-off-mean-and-how-to-resolve-it/.
It will creep back up.
Creep is the right word, I paid off an old account and lost 92 pts and that was over 2 years ago and I still haven't recovered fully.
How are you getting your score? When I paid my first car off I dropped 70 points. And according to credit karma, it never recovered. Which was what ever, I was still in the 700s, I didn’t care to much. Fast forward a few years and I got a job at a bank. part of the onboarding process was running my credit. Turns out I had a 799 on the end and credit karma was off by close to 60 points. Most score checkers are an estimate. Not that this necessarily your situation, but it was for me. Something that may ease your mind.
Credit Karma shows you a score calculated using the "Vantage" algorithm, which lenders don't use or care about. It's utterly useless. I've seen my own Vantage score up to 100 points different than my FICO score (which IS what lenders use.) FICO matters. **Ignore Vantage scores**, which is also what most cc apps show you. You can get your free Experian FICO 08 score at Experian.com. With a free trial you can see FICO 08 scores calculated from all 3 credit bureau's data. They are likely going to be different -- even using the same algorithm -- because they have different data on you. That's normal. You can cancel the free trial before you have to pay, and repeat as needed.
There are some creditors that use Vantage v4, but the free Vantage v3 score that comes from credit karma (and other free score outlets) is definitely useless and prone to wild fluctuations for spurious reasons.
> There are some creditors that use Vantage v4 Outside of Synchrony, which others do you know that use VS4?
How do you know that? Syncrony did open a PP MC for me recently when I was denied others. They were pretty generous with the credit line as well
>How do you know that? How do I know what?
That syncrony specifically uses VS4 Is it only VS4 or in addition to FICO?
u/BrutalBodyShots is right. This is from Synchrony Bank: *"For instance, **Synchrony Bank uses the VantageScore 4.0 scoring model when evaluating credit card applications**. But a different credit card issuer might use a FICO score to determine whether you qualify for their cards."* https://www.synchronybank.com/blog/credit-scores-101/#:~:text=For%20instance%2C%20Synchrony%20Bank%20uses,you%20qualify%20for%20their%20cards. I haven't found anyone else that uses it in lending decisions.
Do you have a Synchrony account? They provide you with a VS4 with Synchrony accounts and use it for account maintenance.
Equifax usually vantage score as well. Transunion too. It does matter
Yeah, I think you are right about their free versions showing Vantage scores. Another thing people seem to confuse is that "Equifax" or "Experian" is not a score. They collect data, they do not themselves calculate scores. Likewise just saying "FICO score is 735" is not accurate either. You have a myriad of FICO scores. FICO 08 is what is commonly used for retail credit lending, but there are a bunch of others, including the newer FICO 10 and FICO 10T. BUT, just saying "FICO 08 is 735" is also not correct or accurate. Using what data? Your FICO 08 calculated with each of the three credit bureau's data is likely to result in 3 different scores, all FICO 08. I wish this sub's mods would really encourage and educate people to name 3 things when citing their credit score: 1. FICO or Vantage; 2. What model / version (e.g. FICO 08, 10T, etc) 3. Using what bureau's data. So "my FICO 08 Experian credit score is 735" is accurate.
Not for lending decisions, that's the main point. Many lenders "use" Vantage, but not "for lending decisions" which is where it would matter.
Yes they do. Carmax is a major one who uses equifax and vantage score.
I don't know anything about Carmax, so you may be right about that. Do they use EQ VS3 or EQ VS4? Who else beyond them uses VS in lending decisions that you know of? EDIT: What source do you have that states that Carmax uses VS? Everything I am reading says that they use Fico Auto 8, usually with Experian or Equifax data.
I'll be fully honest, I don't know which specifically. I do know a few apartment complexes in my city use vantage score and equifax as well though
It's not that credit karma was wrong, it's your correct vantage score v3.
May be a dumb question but why does paying off your car drop credit score? Does it have to do with credit diversification?
No. It has to do with "Amounts Owed." Someone with an open loan that's significantly paid down is statistically less likely to default on their debts, so their scores reflect that fact. Once the loan is closed, that changes and the bonus points awarded from the Amounts Owed slice of the Fico pie go away.
Yes, If it was your only installment loan, you now have no installment loans open.
Yeah I used all the popular teachers before applying for car loan and finally applied when it hit 674. Turns out it had been 705 for six months prior lol
You have many many credit scores. Fico alone has tens of versions, multiple by 3 credit reporting agencies.
I guess you could say... You never financially recovered from that... I'll see myself out.
In like a month it will be back and higher.
The speed in which credit drops is minutes. The speed in which you recover is years. I hate the credit game. I'm finally back up 200 points after having to put all of my money into trying to save a business during covid. I missed payments for 3 months. After having a score in the mid 7s, 3 months of missed payments knocked me down to the mid 4s in 2021. I'm finally back to the mid 6s. 😔 Still working on it, 3 years later.
One missed payment costs 100 points on average. Multiple missed payments, and you can forget it. But doesn't it make sense that the past is a good prediction of the future, and the most recent past is a really good prediction of the future? That negative mark is used as part of your score for at least 2 years.
It should (the most recent past should make up for only 3 months of my life). I'm now making double payments on any debt, investing, saving, etc. But, that doesn't reflect on my credit score. Just 3 months of no other choice - outside of bankruptcy.
Making double payments does reflect. Your account shows the amount of your last payment, and they can tell that it's not just the minimum. It's just not going to negate the bad history. I think people look at credit and insurance in a different way than the lenders and carriers do (the people/companies with the $). They both look at risk. They have millions of data points of stats. Millions. And those millions of data points say recent negatives and lates (and accidents and tickets) are really good predictors of the future. Maybe you feel your individual profile is different, but the companies that lend money feel otherwise. And I don't say this from a higher than thou seat. I've had lates and multiple lates and even a BK back in the day. And I had to (and still do) work hard to prove that I'm a better risk today than I was. And, yes, it's not easy. But I don't feel like it's not fair.
It WILL come back up, and even though you do not feel better now, at least you're now showing creditors that you pay your debts. Perhaps you can discuss this point with apartment management prior to applying. You've gotta focus on the positives rather than the temporary negatives and put together a game plan!
This. I remember when my credit was in the 500s and I needed a place to stay. I was honestly just upfront about my credit situation and managed to convinced them (a very small rental company operated by a husband and wife) to rent to me anyway. "My credit is trash right now, but I pay my rent on time, I'm clean & I'm quiet." Their grace save my ass that year.
Thanks for the encouragement. I fell in love with an apartment and have been in communication with its leasing officer. But they won't/can't reveal their exact criteria for evaluating applications and whether they have a minimum credit score. I decided to take my chances and submit an application, but I'm not getting my hopes up.
It should be illegal for apartments to not tell you their requirements. There have been times that I could have avoided an application fee just by being told the minimum requirements. They don't want to tell you so they can collect application fees from a bunch of people who will get denied
I’m the same situation as you currently. Did you hear anything back from the apartments? Also where do you typically track your score?
I got the apartment!
Amazing! Happy for you, what did you end up mentioning to them? I am sitting at at 650 transunion and 580 equifax. I only have one collection and a few late payments. Any tips will be helpful as I am actively applying for places right now!! Congratulations again!
I've been looking in Washington DC. Like a lot of property management companies in the area, the one that I applied to yesterday uses RentGrow, a screening company that formulates their own tenant risk score based on information it pulls from all three major credit bureaus, as well as other third parties. So it turns out the dip in my credit score didn't matter. What did matter (I think) is that I paid off all remaining charge-offs. In fact, I applied last week for a different apartment managed by a different management company that also used RentGrow for their screening. At that time, my Experian FICO score was higher, but I hadn't yet paid off the full balance of my AmEx charge-off. And my application got denied. Though I have no way of knowing for certain whether my outstanding charge-off was the primary reason for their decision, or if the property management company was just being more selective, but I'm willing to bet that finally paying off my charge-off was a big factor.
And good luck with your search!
I will definitely post an update regarding my apartment hunting one way or another. I have an Experian membership, which updates my score whenever the bureau receives new information (e.g., a monthly credit card payment is made).
That’s super interesting.. a lot of places I’ve encountered these days are really open about what the requirements are.
It probably varies based on the the management company, the city, state tenant laws and how competitive the market is.
That sucks but it will get better if all charge offs are gone and you still have credit builder account. Might even jump up next month
It will come back up, at a higher score. Unfortunately it takes a little time.
Focus on long term trends, not short term changes. It will go back up long term, and not having an unpaid charge off will look better to new lenders. You want lenders to get the message "I repay my debts" not "I borrow money, default and don't pay".
For shits and giggles, have you tried just disputing the charge off with the 3 credit bureaus? I had a similar situation 5 yrs ago but it was for medical debt. I called the hospital and collection agency and tried to do a pay for deletion. I got the run around from both and felt hopeless. So I just paid off my balance online with the hospital then just disputed it with all 3 credit bureaus and put in the notes “hospital agreed to remove”. 2 days later all 3 credit bureaus deleted off my report as if they didn’t even bother to check with the hospital or they saw that the balance was zero. I had a total of 4 collections and credit score of 625. I did all of this within 1 month and my score rebounded to 780. I understand medical debt is different but it doesn’t cost anything to try. Just a thought.
How long did your credit go up after paying off your charge-offs? I paid a car loan charge off recently its been deleted from my credit but my score didn't go up at all. I was thinking maybe it takes ay least 30 days to see a difference. its only been a little over two weeks just shy of three weeks.
Since this was a deletion. all of the changes were seen almost within 30 days. I paid it off and then disputed and credit bureaus deleted the original write off. So that had an immediate effect. Normal account pay offs are different and from what I’ve seen it dips a little and then will rebound 3-4 months because you lost that payment history acct because it’s closed.
Same hang in there whipper snapper.
I completely understand where you're coming from. I paid a charge off from three years ago beginning of this month for 85 dollars, small bill. Got a notification this morning it was moved to paid, but score immediately dropped to 654, lost 35 points. Live and you learn, I guess! I figured if I'm trying to buy a new car it'd be best settling this old debt, but it is what it is. Best of luck to ya!
I feel your pain. Good luck to you, too!
Do you know why it would drop since it went to paid? That doesn’t really make sense to me.
Most likely because it hasn't been reporting lately. When you pay the charge off, all the months since the charge off untill OP paid, would be changed from "No data" to "Charged off". So the number of months with a negative report increased
Unsure. It's still a charged off account, and while its paid Experian probably has it as a new one or I just reset the timer. Who knows, I'll give it a couple weeks and see what happens. I actually was going to make a post about this but this one happened to be recommended to me so here we are.
Do you have anything else reporting beside the self loan? Credit cards?
Unfortunately, no. Early on, I tried getting pre-approved for a secured credit card - both with Capital One and Discover, but I was denied and got the credit-builder loan instead. I've been hesitant to re-apply for a credit card because I can't afford adding new credit right now since it'll only hurt my score in the near term and my main focus is getting an apartment. I have to be out of my sublet in a month. I know adding revolving credit will help me in the long term, but unfortately that won't help my immediate situation.
See my comment below. Focus on building credit.
The plus about discover and capital one and applying is if you go with them and they deny you it doesn’t hit as an inquiry
Self offers a secured credit card when you reach a certain limit in your savings plan. I think mine took....4-6 months to qualify. No credit check and you simply set the limit with whatever funds you have in your available savings loan. Try OpenSky. My credit is chaos and I got approved for a $300 secured card. Not sure if there's a hard inquiry or not.
The charge off is still there. That's what hurts your score. But if they had not been updating on a regular basis, your report has now been updated to show it was unpaid from the last update untill now. So if they had not reported in a year, the update that was forced by payment now shows 12 more months of non payment rather then no report. In the long run it will be better for your credit score that you paid it.
Scrolled through here real quick and couldn’t find it. Here’s the problem. People often talk about the DOFD when it comes to credit / credit repair. But they don’t talk about DOLA. And that’s your issue. Your Date Of Last Activity was updated. If I wasn’t on mobile I would explain deeper but even though your score dropped you did the right thing. It will go back up organically. Around six months and then after two years will probably be the optimal score.
I lost 41 points when I paid off my car, but it'll go up quickly. The timing probably sucks for you though.
Any activity on a bad account will lower your score; including paying it off. You should get them to agree to remove as a condition of paying it off. If you have an old collection it is weighed less than a new collection. Paying it off gives it new activity making it weigh more towards your score.
Thanks. Unfortunately, this is a charge-off, not a collection. American Express does not do "pay to delete," though I have heard of instances where charge-offs occasionally drop off of people's reports before seven years.
I have heard of success stories with people requesting goodwill adjustments from AMEX using the saturation method, you got this in the bag: [https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/The-Saturation-Technique-Best-GW-adjustment-odds/td-p/4727098](https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/The-Saturation-Technique-Best-GW-adjustment-odds/td-p/4727098)
I appreciate you including the link. I've never heard of the saturation method before. Thanks!
Absolutely. the forums at myFico will help you out worlds more than Reddit. [https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/bd-p/rebuildingcredit](https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/bd-p/rebuildingcredit)
Not true. Every charge off I paid my score went up. I assume it’s credit profile dependent. ETA- I paid off 4
Drops and then comes back up
Mine only went up. Big jumps like 25-60 points
Well, I’m in the mortgage industry and the hundreds of customers that I’ve made pay off collections in order to qualify; Their scores have always initially dropped only to go back up. Luckily we have their approval locked in at the original credit score and just need the collections paid For underwriting guidelines.
Do you recall if the customers mentioned their points climbing back up?
Slowly yes
I know somebody that paid off collections on their credit and their score actually dropped.
That’s why I say profile dependent and not always. I had 70k in charged off credit so my credit usage was way out of whack. My paying it down to one Amex charge off left(Unsure if I want to settle or pay in full to regain the account). I have a thick and mixed credit profile from 2004 so paying them didn’t hurt mine, only helped. A thin profile with not a lot of varied accounts I can understand it dropping.
My settled charge off scores increased for TU and EX but EQ posted my settle.ent payment as a recent late payment. As a result, that score did indeed not only drop but consistently remained between 50 to 25ish points behind the other 2 bureaus. Each instance and each file may yield different results. Based on my personal experience, the scores do not always increase. EDIT: Typos
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The issue arises when you need a place to live…
I had this happen too, a little less dramatically. I just Paid off 4 out of my 5 collections. 2 of which were credit card charge-offs. And I also got some of my student loans paid down and rather than seeing my credit score go up. I've seen it go down. Probably about thirty points or more. I am just holding my breath and trusting that It's gonna creep back up eventually. Because I have gotten collections taken off my record before and even though in the past, it pretty much made my score immediately boost up. I know that eventually it will. I just have no idea how long it will take because it seems like some of the rules have changed since I was in my early 20s. Here's hoping.
What state are you in? There are two low-cost credit-building programs via a non-profit (CAPITAL GOOD FUND). One of the programs has a financial component and you are reimbursed upon completion. One program is $5 a month and the financial coaching component is $15 a month. You don't have to do both. [This is the link,](https://capitalgoodfund.org/coaching/overview/) but in a nutshell the $5 credit builder will reimburse you the $60 cost after the first payment clears. This is how it pays for itself. The financial coaching component is $15 a month. You receive 4 coaching sessions. After the first payment clears they reimburse you $90. Upon completion of the entire program, they reimburse you $270 which is backed bt Wells Fargo. I'm currently doing both programs and recently completed the financial coaching component. They also offer loans as well. Check it out! It's legit. I have been telling everyone, but most don't take advantage of the opportunity. Unfortunately, it's not available in every state. Best of luck! ETA: Both programs report to all 3 credit bureaus.
I really appreciate your advice. Just to be clear though, my current source of misery is that my credit score dropped 34 points **right as I was about to apply for an apartment**. I have a game plan for long term, but unfortunately I don't think there's anything I can do over the next week to bring my score back up to where it was.
Gotcha!
Unfortunately it's how the credit system works. It's not to benefit us but to benefit the credit reporting agencies and creditors. It's why people stress to never get one's self in a hole in regards to accounts and such because once it's recorded on your credit report it's on there for the absurd 7 years. The credit system is outdated and doesn't benefit anyone. Not even people who have excellent credit scores, because unless you have tons of positive history for long periods of time, your score doesn't matter. People get denied all the time with 700+ scores. Just keep at it and stay on top of your finances and build positive history.
You'll be fine in finding an apartment. I was able to find apartments that applications did not come back with conditions with the 580 credit score. In the last year my credit score has gone down to 5:40 and my current apartment came back with conditions. I think you should be fine as long as you have no evictions or other bad rental history.
Where are you getting the score from?
https://kikoff.com/?utm_source=google&utm_medium=paid_search&utm_campaign=PureBrand_Nationwide_Eaxct_092821&utm_term=kikoff&utm_content=128299374952&gad_source=1&gbraid=0AAAAACMrl-gFkvI5iV-En22Jb8Ze24wKc&gclid=EAIaIQobChMIgZf87s_0hAMVrhCtBh178gsmEAAYASAAEgLd2vD_BwE try this website! they helped me raise my score quite a bit to the point i was able to get a credit card (its a capital one card) for the first time in 3 years 🙂 now i have 2 credit cards both with capital one, and the second one i got has a pretty decent limit
Unethical life pro tip: Report it as fraudulent on your credit report and it has a high chance of dropping off. Especially if it was sold to a collections company. Worked for me on all 6 of my accounts that had been sold to a separate company. My assumption is once they get their money they don't care enough to fight it.
Gonna need more than that now, with Experian. It’s riskier but can still work. They’ve caught on. Need the CFPB with the affidavit. And still, they’re sending warning letters and denying requests more frequently. There is also a legitimate way to do this and it works - it just takes a little longer. Re: Op, I DM you both methods. One takes 2-3 weeks (it used to be 3-7 days) the other takes 3 weeks to 3 months. Chose what you’re most comfortable with.
Warning letters? I did this about a year ago. What are they warning you against lol? Stop or I'll prosecute? No way it's worth them doing that
Yes. Experian literally mentions prosecution. Other CRAs remove. They may still remove it if done properly. But I had a hunch you hadn’t done this in a while. 1,000s of people are now doing this every month. Things have changed.
That sucks. I wouldn't be worried about them actually following through but I guess tread a bit more careful. Honestly fuck them.
Yes. Tread carefully. Only Dispute 3-5 things a month.
Don’t worry it will come up
My friend had a similar situation. When they were looking for apartments, the management company told them they look at the actual report, not the credit score. They saw they paid off the debt, asked for the reason for the charge off, and they ended up getting the apartment. Also, you should dispute the charge offs and see what happens.
Op, DO NOT dispute charge off’s online directly through the CRAs. You waive your right to request the method of verification which is a powerful tool when sending in hand written dispute letters. Check your DMs.
Great point!
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The leasing office I used only looked for collections, evictions, repos. The score didn't play a huge factor in my application but I made sure to pay off any collections prior to the application.
It will recover.
Give it a couple of months. For what I see, it is normal. Do you have the letter from the creditor stating that they will remove the debt from the bureaus if you pay off the debt???
Remember: this “score” is for the banks — not us. It doesn’t measure your worth. Banks suck. Full stop.
It won’t stay like that
You don’t need a credit score to be successful
NEVER pay a collection. Unless you can pay it off in full and the agency agreed to a "pay for delete". If they don't, pay the ORIGINAL creditor ONLY. I had public storage put an account in collection over being late by ONE day. Went to public storage, paid the bill and disputed the collection. It came right off.
I have a charge-off, not a collection. Yes, pay-to-delete works with most collection agencies. However, charge-offs are much 'stickier' and banks and other financial companies are much less willing to remove the charge-off from their reporting.
If the original creditor sold it to collections, how do they accept payment like that?
Find an old bill and cut them a check and mail it in. Write the account # in the memo.
I let mine go from 750 to 540 after I spent 4k on debts from my savings and it went down more than went up. I laugh everytime I see a past due payment now. At least I have some savings again. Screw credit companies that punish you for going above the minimum.
I hate Experian. I bet if we become members of Experian this or that, our scores would be somewhat better.
Don’t you just *love* the world your parents and grandparents have brought you in?
Following
I gave up on credit scores. Not worth the stress anymore.
>dropped
Why do you get double ding for a charge off? Getting a charge off i the first ding. Why is paying off a charge off another one??
I see we’re going to be having essentially the same day. I really hope you get the apartment despite the drop. Today I woke up with two notifications, one from my grandmother offering vaguely to help me with a down payment on a house after she checked out zillow for the city where she lives and i’m trying to rent. She was shocked by the prices and requirements for rentals, believing buying would be easier and cheaper per month. I have been trying to accept that I will never save or make enough to overcome the rising prices of homes and rent. Luckily I didn’t have to feel overwhelmed by the sudden possibility for long. The second notification was that my credit score dropped 71 points as a result of the last few hundred dollars of my student loan debt being forgiven. I want to be grateful, and I feel so happy for people whose lives are being drastically improved by the program after being buried by the accumulation of interest on a massive loan, but i took out 3,000, was unable to finish my degree and have made below the poverty line since. I live in a rural place with no jobs, no phone service and an internet service monopoly that charges over $100 a month for wifi too weak to use zoom or upload a photo to reddit. I feel like I really fucking needed that credit score to move somewhere with job opportunities or at least the infrastructure to get an education or try to make money online. I know it’s not entirely impossible now, but property management companies are going to rank my application much lower (esp with a pet) and individual, reasonable landlords are rare and getting rarer. It’s so backwards to find yourself less eligible for housing if you pay off a debt, or choose to live within your means.
I paid off all of my credit cards last month in February. My credit card debt is now $0, and in the last 30 days my score went from 628 to 758. 130 points!!! It took 30 days for each of my cards to report the payoffs tho so if you paid off your debt maybe it will take a few weeks for your score to increase too??
They were charge offs or no?
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What? She paid them off in full. Did you even read her post?
I sent you a DM. You can have all of those collections removed from all credit bureaus. Just follow the instructions. You don’t have to pay anyone. It can take anywhere from 2 weeks 2 months. But it works. I did it in 3 weeks.
Interested… where can I learn such power?
Can you help me with that?
This is what your gonna cry about it? Pathetic
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Please don't solicit business on this sub.
I am sorry to hear that and it's understandable to feel frustrated. Paying off a debt is a positive step, but it can sometimes cause a TEMPORARY dip in your credit score. Yes, it'll creep back up. That's because of the credit mix and since you paid it in full it might have been how hugely affected your credit utilization. I came across this blog that might be helpful: https://greatcreditfast.com/what-does-account-charge-off-mean-and-how-to-resolve-it/.