Credit Score Took a HUGE Dive

[Cassandra Sifford]

HAPPY FRIDAY BP!!! I've been a homeowner for 6+ years and had finally decided to get into REI. I'm still educating myself (been doing so for the past 2 years), but decided to a HELoC to fund the down payment and would mortgage the rest.

I've been working on my credit for some time now and got my score up to 733.  In keeping up with my score on Credit Karma, yesterday I had the shock of my life ... my score dropped down to 634 within the past 2 weeks :(  I let a cell phone bill of $98 hit my credit report, which I believe caused the dive (paid it off yesterday).  I also paid off a couple accounts (both collections and a current credit card) that have yet to be updated on my report.  

Question is would a lender / underwriter be more understanding of extending a loan with a good interest rate in reviewing my past credit history?  I've been on time with my mortgage, student loans and other accounts at 100% for a number of years vs. this most recent incident.  I really don't want to postpone being an investor, but I feel like I may have to because of my score.  

If anyone has any great advise on how to boost my score, lender input, REI experience in relation to my issue, etc. , I'm all ears...

Have a great day ... Cassandra :)

[Michaela G.]

You mentioned that you paid off an old collection, please be aware that that may have further hurt your score. 

A charge off is tied to the account of last activity, regardless of whether it's been paid off or not. Does not change how it's counted - only the last activity date counts. So, if you had a charge off 4 years ago, it looks better than if you paid it all off yesterday, because now the 'last activity date' is yesterday and it looks as if this is a new charge off.