Q: I disputed a bankruptcy on my credit report that was reporting the wrong chapter and it was deleted. I expected my credit to increase quite a bit but instead my score went down over 20 points; do you know why?
A: I would review your report to see if anything else happened during this time frame. If it hasn't it's probably because you're apart of a different scorecard now. This is another piece of the FICO scoring puzzle that generates our credit scores. Scorecards group consumers with similar scores together to predict risk. FICO hasn't released how many of them there are, but there is one for persons with a bankruptcy on their credit, those with negative info but with no bankruptcy, those with very minimum, or thin credit history, etc.
Basically, this means that when you were apart of the group of people with a bankruptcy on their credit you had better credit – for someone with a bankruptcy.
Once that bankruptcy was removed, you became apart of another scorecard group where it may not be that good compared to the other consumers on that scorecard.
Keep in mind that each scorecard is comprised of the same 5 factors: payment history, amount owed, length, new credit and credit mix. So, as long as you are keeping every other aspect of your credit in good standing it'll increase again shortly.
Also, fluctuations of 20pts is not uncommon when removing or adding new credit lines to your credit. They are often recouped between 1-3mths. Feel free to Google FICO scorecards for more info; they have some great info on FICO's website.
Hope this helps!
