Dispute letter had collection account deleted???

[Anonymous]

I disputed a collection with NCO.  I looked yesterday and the account was completely gone and my score shot up 19 poins.  When an account is disputed, does it temporarly delete from your credit score and report allowing your score to rise, only to be added back if not truely deleted?  I am confused and supposed to close on a house in two weeks.

[RobertEG]

Take the window of comfort.

But dont rely on it to continue.

If you are about to close on a mortgage, and they do a pull of your CR prior to closing, they may see one of two things.

First, the account is deleted.  No collection, no problem.

Second, that the CA is still in your CR, but temporily deleted from credit scoring due to the dispute.  It will thus show a status of dispute.Yes, deletion from credit scoring is only temporary, but the prior reporting of the debt should be visible to any mortgage lendor.

Why would a CA delete without payment of the debt? Best guess is that they have sold it to another CA, who can then report.

I am kinda perplexed at how your mortgage lendor was not aware of the unpaid CA to this date, and did not requrie payment of debt to them prior to settlement on a major principal loan to you.

[Anonymous]

Thanks for your answer, but still have a question.  WHhen I looked on myfico.com, it had removed the account itself from the collections section.  I've heard that when in dispute it may not factor into your score, but the account itself is gone.  Does this mean it's permenately deleted (at least from the initial collector, NCO)?  Thanks again...

[guiness56]

Many times during a dispute, the account is removed.  When the dispute is resovled it will either be permanently gone or put back on your CR.

[Anonymous]

Here is my issue.  Due to the deletion, I now qualify for a mortgage i have applied for.  Since the collection has been completely removed, i assume they can't see it is in dispute?  I thought they mark the account has "dispute" and leave it on there for such a reason. 

Am i to assume that if i close before the account is put back on my report (if it is temporary), I will be able to close without a problem?

[Lel]

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@Anonymous wrote:

Here is my issue.  Due to the deletion, I now qualify for a mortgage i have applied for.  Since the collection has been completely removed, i assume they can't see it is in dispute?  I thought they mark the account has "dispute" and leave it on there for such a reason. 

Am i to assume that if i close before the account is put back on my report (if it is temporary), I will be able to close without a problem?

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Did the collection appear on all 3 of your credit reports, and if so, did you check all 3 credit reports?

This could be a very important and potentially problematic factor for your final mortgage approval.  Active disputes on a credit report can often kill a mortgage application.  If you only checked EQ, for example, and saw the CA was deleted, but it is still present and in dispute on TU and EX, the underwriter might pull the plug on the loan.  This is a well-described phenomenon over on the mortgage loans board.

If the CA doesn't appear anywhere on your credit reports, and doesn't resurface at closing, then I suppose you might be okay.  But be aware that lenders are pulling credit just before closing a lot more frequently these days.  Read the article referenced in this thread.

I'm a little confused about the sequence of events in your home purchasing process.  You said that you're closing in two weeks - I would have assumed that if this were the case, then you'd have already been approved for a mortgage, even with the CA on your report.  If this is the case, then disputing the CA wasn't necessary.

[RobertEG]

When a creditor, especially a high-balance lendor such as mortgage lendor, pulls your CR, they are seeing a MUCH more expanded view of your credit file than you see in the simplistic commercial reports that you get. Reports vended to consumers are brief, simplified reports.

If you want to see the difference yourself, just compare the reports you get, say, here on myFICO with a report you can get from the non-commercial site at annualcreditreport.com.

When you file a dispute, your credit file is updated to enter a current status code for the account as under FCRA dispute.  The account is not deleted from your credit file based simply on dispute..Account status code is updated.

FICO may not score it while under dispute status, and maybe some consumer credit reports will temporarily not show it, but unlees the CA actually updated account status to a deletion, it is still in your credit file.

If I were you, I would order a more complete CR from annualcreditreport.com, and see if the CA actually deleted, or just reported it as under dispute.

I am still kinda perplexed how, at this stage of the morgage process, the lendor was not previously aware of this unpaid debt.

[Anonymous]

Hey, sorry for the confusion.  I was pre-approved, but the broker told me that i either had to pay the collection or get it deleted.  When I was pre-approved, i was JUST under the needed 620 score, but she was confident that I would  not have a problem getting there.  The same day the deletion hit and my score jumped, she sent it to the underwriters.  I hope that clears things up. It truely was not my debt, and it was over $700.00.  That is the reason i didn't go ahead and simply pay it.

Is it possible that my dispute carried and it simply deleted without further incident?  That is the point correct..lol.  It was NCO fin and from what I read on here, it seems they take collections that aren't the strongest, and delete many times.

As of right now, I believe the account shows up on 2 of three reporting bureaus.

[honeybunnygal]

I had something kinda similar happen to me. I had a collection showing on my credit report for an old T-Mobile bill from 2005 (slated to report until 2012). The CA (Pinnacle) was reporting. When I started my credit repair journey I sent a DV to the CA. A couple weeks after I sent the DV, the collection disappeared from the two reports it was on. A couple weeks after that I paid T-Mobile in full ($256) & haven't seen any sign of it anywhere on my reports since (this was back in September 2009).

If you could pay it in full AND you know it is your debt, I would try to work something out with the OC.

Good luck!

[Anonymous]

Robert:

The private lender showed me the report they just pulled and the collection is GONE.  Due to this, she just sent the final docs to the underwriter, and said they are about a week away from being finalized.  She had previously sent them all the info, but i needed to raise my score 8 points.

Is it safe to say that the account was permanently deleted because of my dispute letter to NCO (or until they sell it to someone else)?