My credit score dropped because I paid of old accounts.?

Question

Hi. I need help. My credit score is 553. It was 601 a few weeks ago. I have several derogatory marks on my credit history (mostly medical bills that went to collection). I obtained my credit report in 03/06 and have been diligently paying off all late accounts. I just had 2 new items pop up with my credit report watch. I disputed both items. The collection agencies reported them accurate despite my sending proof of payment PRIOR to their posting the derogatory remarks. I am planning on moving to NYC in 02/08.

I have several accounts with perfect history.
1. Why did it drop when I did not pay late?
2. How long will it take me to get over 620?
3. Can I get an apt with a credit score of 620?

Answer 1

The company has to update your credit within 30 days. If they don't send them a certified letter. It does drop once you pay off but once it's cleared it goes up. Just stay on them about it.

Answer 2

The two new derogatory items put into your credit report definitely had a factor in lowering your credit score. Because the collection agencies did not remove the inaccurate information, your next step is to dispute it with one of the major credit bureaus (Equifax, Experian or Transunion). I will put a link on the bottom of this message that will give you more information on effectively disputing negative items on your credit report.

Another thing that can lower your credit report is paying off collection accounts. The older a negative item is on your report, the less damaging it is to your credit score. When a collection account is paid, it resets the date showing it as a more recent item, lowering your credit score. You should only agree to pay off a collection account if they agree to remove it from your credit report.

As far as whether you can get an apartment or not, most places will rent to you as long as you don't have any evictions in your credit report. However, having a low credit score you may have to pay additional deposits. 553 isn't the worst credit score in the world, but you may have to cough up more money to move in. If you get those two negative items removed from your credit report, that may bring your score up to the level you want.

Answer 3

Join the club. We have been paying off debt like crazy the last few years (since a bankruptcy that actually removed very little of our debt). For a while our score went up, now it is tanking, but who cares?!! We are getting out of debt & it is AWESOME! You CAN have a life w/o a credit score, WE DO! Check out the website below. We have been following Dave's plan for a few years now. It has revolutionized the way we think about finances.

Answer 4

There are a number of factors that can impact your credit report and fluctuations of 5-10 points over a few weeks are not necessarily all that uncommon.

I use Experian's FreeCreditReport.com site to monitor my credit and credit score. They have a cool score simulator that will tell you how your credit score will be impacted over time. Here is some more information if you are interested:

http://consumercompare.org/creditreport/compare.php#fcrcom

Answer 5

The two new items caused the drop. When you get them clear up, your score should rebound.