Credit score 805 last week, 570 today...

[dirtbiker]

I keep a fairly close eye on my credit report and score, well, mostly score. It has been right around 800 for quite awhile now. Last week was 805. This morning I received an email from my credit monitoring agency that I had a change in my credit report, and was hoping it was a score increase, as I had paid a bit extra on my mortgage last month with a small bonus I received from work. I logged in and was horrified to see my score was 570! I checked on the different categories making up the credit report and everything was listed as either good or excellent (I think this was how they were labeled, anyhow), and I thought maybe it was a mistake, so I did some more digging around, and saw I was in delinquency on my student loans. I immediately logged into my student loan servicing account, and was unable to. I then called my student loan servicer, and found out I was over 120 days past due. It seems my auto-debit was inactive, and they couldn't tell me why. My wife and I set up the auto-debit at the same time, and hers has been taken out each month, and mine hasn't.

After a VERY long phone call, I brought my account back into good standing. I also inquired as to where the mistake occurred where the auto-debit had stopped taking place, and found out it had never started. I make small payments each month, and then through my employer and military, I make a large lump sum payment each year, which is the source of how I predominantly pay down my loans. Because of this, I didn't notice the relatively small missing payment each month. Yes, I definitely should have been keeping a closer eye on this. Yes, I will be adjusting how I monitor my accounts and banking.

I had asked for a dispute of the credit report through NelNet (the student loan servicer), since the auto debit was never set up, despite being assured it was when I spoke to them, and was told that it would be denied. They said it was originally set up through Great Lakes, not NelNet, so the dispute would have to come through them. Great Lakes no longer exists. Quite a conundrum. Regardless, I did dispute it, though I have no hopes it will accomplish anything.

Obviously I made mistakes in this, but I've worked very hard to maintain an 800+ credit score, and for it all to topple without me even realizing is a tough pill to swallow. I'm sure it will increase now that it is out of delinquency, but now that will be on my credit report for many years to come.

Has anyone ever been through something like this? Any advice on how I can navigate this? Do I just have to buck up and wait it out? I honestly have no plans to change employers or make any purchases with loans, so hopefully this will impact me minimally. However, will my available credit be decreased? I have about $100,000 available to me on credit cards (I maintain a $0 balance each month), which obviously helps my credit. I'm hoping this doesn't all just pile on...

 

[Koolau]

Just one more of those "gotcha" things that we have very little control over and yet end up responsible for chasing down when someone screws up. I wouldn't even know where to start if this happened to me - not that I plan to borrow money. BUT I understand that lots of things (like insurance rates) are affected by credit score - meaning we DO need to keep on top of things.

At my age, I just don't need the aggravation.

 

[walkinwood]

I am sorry you had to go through this. I have had minor issues like this (scheduled payments for credit cards not being set up properly), but luckily, I've caught them in time.

I'd be interested to see how this affects your credit scrore in the long run - ie. how long does it take to return to a stellar value. I'd appreciate you updating this thread as time goes on. Thank you.

 

[pacergal]

Could you ask your loan account servicer to send a letter to the credit bureaus notifying them you are in good standing again? Not sure it would help change the history, but moving forward, by making all payments on time again, hopefully the score will increase over time.
You could also send a letter of explanation to each credit bureau, in the hopes that they may make adjustments.

My DSIL had a low 500's score when he married my daughter, Wells Fargo had put some odd notice on his account. It affected their mortgage application and interest rate,(at that time interest rates generally were below 5, they had to pay 5%--still not too bad). Even the mortgage company was unable to get Wells Fargo to change things and told the kids they had never seen poor response from WF like that. By making regular mortgage payments, he has gotten his rating back up in the 800s., but it has been 7 years.

 

[dirtbiker]

I am sorry you had to go through this. I have had minor issues like this (scheduled payments for credit cards not being set up properly), but luckily, I've caught them in time.

I'd be interested to see how this affects your credit scrore in the long run - ie. how long does it take to return to a stellar value. I'd appreciate you updating this thread as time goes on. Thank you.

I'll make sure to update this. I've become so accustomed to having excellent credit, that this is just bizarre right now...

 

[Koolau]

Could you ask your loan account servicer to send a letter to the credit bureaus notifying them you are in good standing again? Not sure it would help change the history, but moving forward, by making all payments on time again, hopefully the score will increase over time.
You could also send a letter of explanation to each credit bureau, in the hopes that they may make adjustments.

My DSIL had a low 500's score when he married my daughter, Wells Fargo had put some odd notice on his account. It affected their mortgage application and interest rate,(at that time interest rates generally were below 5, they had to pay 5%--still not too bad). Even the mortgage company was unable to get Wells Fargo to change things and told the kids they had never seen poor response from WF like that. By making regular mortgage payments, he has gotten his rating back up in the 800s., but it has been 7 years.

wf doesn't have that great a reputation for other stuff either.

I would think there would be the opportunity for an automatic appeal of any significant credit downgrade. You shouldn't have to find out about such things when you check your credit score.

 

[dirtbiker]

Could you ask your loan account servicer to send a letter to the credit bureaus notifying them you are in good standing again? Not sure it would help change the history, but moving forward, by making all payments on time again, hopefully the score will increase over time.
You could also send a letter of explanation to each credit bureau, in the hopes that they may make adjustments.

My DSIL had a low 500's score when he married my daughter, Wells Fargo had put some odd notice on his account. It affected their mortgage application and interest rate,(at that time interest rates generally were below 5, they had to pay 5%--still not too bad). Even the mortgage company was unable to get Wells Fargo to change things and told the kids they had never seen poor response from WF like that. By making regular mortgage payments, he has gotten his rating back up in the 800s., but it has been 7 years.

I am going to wait for the decision from NelNet before contacting the credit bureaus. Even though they basically already told me I was wasting my time disputing it.

After that, I guess I will send a letter or dispute through the credit agencies.

I'm absolutely certain I'll be good in 7 years... But I'm hoping it's more of a logarithmic increase, with big gains quickly...

 

[jazz4cash]

That’s tough. I believe credit scoring is mostly a scam but monitoring is useful to make sure things are normal. I would’ve expected some type of notification before going 120 days delinquent. It could've been much worse if you were not checking.
Did I understand the auto-debit was setup at the loan servicer’s site and they did not pull the payment as you authorized? I try to push all payments from my main account so I can monitor and have more control.

 

[dirtbiker]

That’s tough. I believe credit scoring is mostly a scam but monitoring is useful to make sure things are normal. I would’ve expected some type of notification before going 120 days delinquent. It could've been much worse if you were not checking.
Did I understand the auto-debit was setup at the loan servicer’s site and they did not pull the payment as you authorized? I try to push all payments from my main account so I can monitor and have more control.

They said they tried to call several times, but I honestly get 10-15 spam calls a day, so I just don't answer numbers I don't recognize unless they're local, and even then, they're usually spam. However, there was no notification from the credit monitoring company.

It was set up over the phone, as the website left a bit to be desired...

 

[jazz4cash]

They said they tried to call several times, but I honestly get 10-15 spam calls a day, so I just don't answer numbers I don't recognize unless they're local, and even then, they're usually spam. However, there was no notification from the credit monitoring company.

It was set up over the phone, as the website left a bit to be desired...

My phone blocks unknown callers due to spam, bots. I rely on legit unknowns to leave voicemail. Sadly most of these aren’t really setup to protect us unless you pay, I guess. I do get some alerts and “free” access but can’t say how reliable they are.

 

[Digger1000]

My score is probably 0. The only time I borrowed money was in 1983 when I borrowed $500 even though I didnt need to.

 

[frank05]

This is why I always login at least once a month to all of debt websites to insure a payment was made.

 

[Gumby]

Based on the speed with which my credit score changes in response to things like buying expensive plane tickets on my credit card and then paying the bill a couple weeks later, I'm guessing that you should see a relatively quick positive response to clearing your default, but that's all it is - a guess.

People have chided me here and elsewhere for keeping such a close eye on my financial affairs, like tracking every dollar I spend and regularly watching my bank account on-line, but your experience is exactly why I do that. I don't like unpleasant financial surprises.

 

[FlaGator]

Sorry to here about the complication.

Another reason to not leave student loan debt hanging around if one has the means to extinguish it. There has been too much going on with servicers to expect reliability.

 

[SecondCor521]

Based on the speed with which my credit score changes in response to things like buying expensive plane tickets on my credit card and then paying the bill a couple weeks later, I'm guessing that should see a relatively quick positive response to clearing your default, but that's all it is - a guess.

OP has a different situation.

Your credit card company probably sends your credit card balance to the credit bureaus monthly after your statement closing date. This happens every month and each month is a new data point.

A credit score is calculated from the credit report whenever someone (either the person or a lender) pulls the score. It isn't stored separately or permanently.

So when you check your credit score, your credit report is generated, including your most recent credit card balance, and the score is calculated from there.

The OP being delinquent once for over 120 days is an event that was reported to the credit bureaus. As a single event in time, that will stay there for a while, and will adversely impact their credit score as long as it's there.

Being 120 days late is a pretty big deal in the eyes of the credit scoring algorithm. Lenders figure that someone might be 30/60/90 days late for a variety of reasons (illness, forgetfulness, out of the country, temporarily busy with life), but 120 days starts to look bad.

People have chided me here and elsewhere for keeping such a close eye on my financial affairs, like tracking every dollar I spend and regularly watching my bank account on-line, but your experience is exactly why I do that. I don't like unpleasant financial surprises.

Yeah, I track regularly too for similar reasons. I have noticed people in their 20s and 30s tend not to do so and they tend to approach finances with a different style - they trust the banks and the other financial institutions' numbers and records and don't independently check. It seems like needless overhead and it is as long as the numbers agree, which they do most of the time. Just not all the time, as I'm sure you know, and as the OP found out.

...

OP, you can't really dispute the delinquency with the credit bureaus because it sounds like you were in fact late on your payments.

You can put an explanatory note on your credit bureau, but the credit score algorithms won't read that note and a lot of credit issuance is automatic. You can hope that if you appeal a credit decision the lender will read the note.

Your score will heal over time as you provide more data points that you're paying your bills. I don't know how long, but I'd guess it'd be several years.

 

[Aerides]

I'm absolutely certain I'll be good in 7 years... But I'm hoping it's more of a logarithmic increase, with big gains quickly...

If nothing else takes place wrt to the disputes and such, this will improve much quicker:

In a month or so, once the debtor reports the new status (which they will), as current, your score will leap - right now it's reported as an open wound. So once that's healed - current - it will report as such.

Event newness is also a factor, so that will dip will also fade with it.

No, you won't get back to 800+ without some removal, but you might well get back into the 700's in 3-6 months. That's the time to dispute with the Bureau's I think. I'd keep on at the loan company in the meantime, if they screwed this up.

 

[easysurfer]

I requested my credit reports about a month ago from the three credit Bureaus. Two reports arrived soon. Equifax (no surprise as they are so incompetent) ghosted me. Didn't get anything back from them.

 

[mystang52]

I don't know for sure, but I would think OP's dispute will help in the event he gets rejected for credit, or has to pay a higher interest rate on a loan. An appeal of that rejection, citing the dispute, MAY help.

 

[wrigley]

Lowering the $100,000 available amount to you for credit cards would probably increase your credit score even though you maintain a zero monthly balance.

 

[Aerides]

Lowering the $100,000 available amount to you for credit cards would probably increase your credit score even though you maintain a zero monthly balance.

Mine is over that, and I'm well over 800. But yes too much available credit can make a new CC see you as a risk (why do you want more are you going to declare bankruptcy, silliness).

My biggest downfall? Not having a mortgage or car payment. Credit ratings like to see you can juggle. Juggling 1-2 balls is not impressive, juggling 5 is. There's a sweet spot, you have to show you can "manage" credit, and that doesn't mean keeping it unused. It means keeping everything used a little bit, new account every year or three, etc. A person who has only 1 credit card for 20 years is going never going to break 800.

When I first started looking into mine as I was just about 803 or so, my gaps were lack of installment loans, and no new cards/loans. By getting a new CC every 2 years, I take a very small dip with a new inquiry, but then it goes up and I sit in the 820's most of the time.

 

[Flieger]

Lowering the $100,000 available amount to you for credit cards would probably increase your credit score even though you maintain a zero monthly balance.

I don't know if it is still this way, but used to be that having a bunch of credit available with no use of that credit was not conisdered positive for your credit report. Need to have some use and consistent repayment.

Flieger

 

[JoeWras]

To OP. Ouch. That hurts. If it were me, I'd try to keep low level pressure on the situation and see if anything can be done. Otherwise, take this as a lesson to monitor things more closely in the future

People have chided me here and elsewhere for keeping such a close eye on my financial affairs, like tracking every dollar I spend and regularly watching my bank account on-line, but your experience is exactly why I do that. I don't like unpleasant financial surprises.

I've been chided too. Something we share. I don't do any auto downloads to Quicken. I put every last cent in by hand for Quicken and Turbotax, including all my spending, even the $1.29 for coffee at the gas station. That connection each month and year keeps me grounded to the situation. When things go wrong like this, it becomes very obvious.

Lowering the $100,000 available amount to you for credit cards would probably increase your credit score even though you maintain a zero monthly balance.

Not sure about that. I recently bumped up my available credit and finally got from the low 800s to about 830. However, it isn't $100k! There is probably a sweet spot that is clearly more than $10k, but probably less than $50k or so.

I don't sweat credit too much. But there are some considerations. DW is looking for a car. She's seen available 0% interest offers. You won't get approved unless you have stellar credit. We don't like loans, but she figures of we have 0% and pay it off per schedule, the money working in a Treasury note for an easy 4% or more will add up pretty quick.

 

[thod]

I also have used Quicken as a desktop app for ~25 years. I enter everything. The only place where I 'fudge' stuff is with cash. I only count the dollars. The cents do not matter, so if something costs $1.25 and I hand them 2 dollars, I count the expense as $2. If I handed them $1.25, then the cost was just $1.00.

So, my first thought to this post was how could this have not been noticed by someone for longer than a month. But then I have to realize that not everyone tracks stuff like I do. I also do not judge anyone about it either. Because I assume I am more in the minority.

 

[CaptTom]

I'm just waiting for mine to go down. I'm "delinquent" on my cable bill.

I called them a month ahead to cancel. Then they billed me for that month anyway. I called and tried to explain, but they didn't care.

So, I'm going to collection.

Big deal. My credit score is good and I don't need to borrow anything. I'm thinking this will be sort of entertaining. Eventually I'll hear from a collection agency. Maybe they'll listen, but I doubt it. So I'll issue a written demand that they cease and desist trying to collect. Then I'll watch my credit score go down. Should be interesting.

 

[JoeWras]

One would think a cable bill is less impactful than a loan. It would be interesting to compare. I know nothing about the hits on these kind of things.

What I have noticed is if I put down $8k or so in items on a credit card, that gives me about a 15 to 20 point hit. When I completely pay it off the next month, that hit completely disappears, and sometimes goes up a bonus point or two.