Changing Credit Scorecard Groupings Could Mean Surprise

Scorecard groupings are not talked about nearly enough so I thought I would take a moment to explain the because they can cause unexpected credit score changes.

A scorecard is a category that the consumer is classified into for determining your credit score. It is based upon grouping your report with others with similar credit profiles. For example, people who have bankruptcies on their credit file are grouped into one “scorecard”. People with chargoffs on their credit are grouped into another so on and so fourth.

Consumers with a bankruptcy on their credit reports are on a different scorecard than consumers who do not have a bankruptcy on their reports. When you move from one scorecard to another, the formula used to determine your FICO score changes as you are “re-grouped.”

Here is where some people are often surprised. mnalmsdr Let’s say you have a bankruptcy and a couple charge offs on your credit and your current credit score is 680. I bet you think if you get that Bankruptcy deleted your credit score would improve right? Would you be surprised if your credit score dropped after deleting the bankruptcy? There is a good chance it will.

Why? Because you were originally in a category with other BKers, and the fact that you had a 680 probably means you had some positive accounts as well or atleast that the BK was far behind you. In short you may have been near the higher end of the BK scorecard. If you manage to remove the bankruptcy either naturally e.g. Statute of limitations, or through credit repair, you will move to another scorecard, probably with people with decent,  nigeriasoccernet  or at least better credit (no BK’s)

Now, where you were at the higher end of your previous scorecard group and were just moved to another group, chances are you might be at the bottom of that new group and may have to spend some time climbing that ladder. Sort of like a ballplayer who may be an allstar in farm leagues, may not be so great if moved up to the pro’s.

What you can do to avoid being thrown at the bottom of a new group is have all your affairs in order. Pay down your credit card balances, remove all accounts listed as “in bankruptcy” first. Etc etc etc. Don’t panic, you have made progress, but its kind of a two step forward, one step back process.

Marc Chase is a Partner and credit consultant at Where you can find the most effective and legal ways to repair your credit!

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