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Credit Report & Scores

Credit Score Went Down When Positive Account Was Removed

Dear Experian,

I just lost 20 points today because one of my accounts dropped off my report. It had been paid off for over 10 years. What can I do?

- YMN

Dear YMN,

Experian keeps positive accounts on the credit report for ten years from the date they are closed, so it sounds like the account in question showed a positive payment history with no late payments. Because the account was in good standing, it is possible that no longer having the account on your credit report could have affected your credit scores. However, your more recent account history has a much bigger impact.

If your credit is in good shape overall, it isn't likely that the loss of 20 points will affect your ability to obtain new credit at favorable rates. However, if you've had credit difficulties in the more recent past, your credit scores will reflect that.

Both current and potential lenders are most interested in how you've been managing your credit recently, so that is what will carry the most weight in your scores. If you continue to manage your open accounts well, your scores likely will bounce back up fairly quickly.

Keep in mind that credit scores tend to move up and down a bit as information in your credit report changes. However, they will trend upward overtime if you are responsible with your credit use.

Improving Credit Scores After Positive Account Removed

If your credit scores aren't where you'd like to them to be, there are steps you can take to begin improving them. The two most important factors in credit scoring are your payment history and your utilization rate, often referred to as your utilization ratio. Anyone can help increase their credit scores if they:

  1. Bring past due accounts current. If you have any accounts currently past due, you should bring them current as soon as possible.
  2. Pay off any outstanding collection accounts. The newest credit scoring models from FICO and VantageScore no longer include paid collections in their calculations, so paying off a collection account has the potential to increase your scores right away.
  3. Pay down credit card balances. High balances on credit cards are a sign of risk to lenders. The higher your balances are on revolving accounts, the higher your utilization rate, utilization ratio. High utilization hurts your credit scores, while a low utilization rate is good for credit scores.

Pay Attention to Risk Factors

In addition to making all your payments on time and keeping your balances as low as possible, you will want to review your credit score risk factors. You didn't mention where you obtained your credit score, but you should have received with it a list of the individual risk factors that are most affecting you currently.

Although there are many different credit scores, and the credit score number you receive may vary, the risk factors tend to be very consistent. Making positive changes to those factors will likely help all your scores improve.

Thanks for asking,
Jennifer White, Consumer Education Specialist

This question came from a recent Periscope session we hosted.

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