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Question:
I was with a different credit repair service via my student loan co. I was with them for about 5 months at $100/mo. I only have very old delinquencies. I canceled them last month. My credit score is worse now than when I started. It was 666. Now it is 656. What could have happened? I am hesitant to start up again.
Answer:
It’s difficult to guess as to why your scores could have dropped but, a very important thing to understand when working on improving your credit scores is that the age of the account activity impacts the scores quite a bit.
FICO tells us that accounts active within the last 6 months have the most impact on credit scores. Accounts active within the last 2 years have the second most impact. And finally, accounts active outside of 2 years have the least impact on your credit scores.
This is just one guess of something that could have happened but, if the company you hired disputed an old debt that hasn’t reported any activity for 5 years – if verified as accurate, the credit furnisher would have had to contact the credit reporting agencies and update the account information, as well as update the activity on the report.
So basically, if this was an old collection or charge-off, instead of this account now reporting as a 5-year-old collection that hasn’t shown activity in 5 years, it is now a 5-year-old collection that last reported this month and it will have a much more negative impact on your credit scores.
In this case, it would make more sense to contact the creditor directly to have them validate the debt or submit a section 609 request, instead of going through the credit bureaus.
If the account is deleted, your scores go up and you’re done but, if the debt is verified, the creditor will not be compelled to update their information with the credit bureaus and the score will not be negatively impacted.
Sometimes credit repair requires a scalpel instead of a hand grenade.
Obviously, other factors like your credit card utilization, new credit, inquiries, mix of credit, etc… could also have impacted the credit scores.
If you would like, feel free to email a copy of your credit reports to consult@creditfirm.net so we can review them or call us for a free credit consultation at 800-750-1416 and we will advise you on the actions that can be taken to increase your scores.
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