Fico score dropped nearly 90 points within 4 days

[ACG]

On 03/22/2014 i pulled my fico score which was at 668. I just received an alert and logged in to see it had dropped to 583. The alert mentioned this: 

This score decrease may be caused by this new reason:
There is no recently reported activity on any of your non-mortgage credit accounts

The account that triggered this alert is from CapitalOne where i have a maintained a 0 balance for the last 30 days but initiated a dispute 2 days ago regarding some fraud charges. See below.

I'm trying to understand why this dropped.

Account opened: X/XXXX

Description: Consumer disputes this account information
Credit card

	Previously reported	Newly reported
Balance:	$0
Past due:	$0	$0
Status:	Pays account as agreed	Pays account as agreed
Last activity:	3/1/2014	3/1/2014
Description:	Consumer disputes - reinvestigation in process Amount in H/C column is credit limit	Consumer disputes this account information Credit card

[user5387]

I don't know the reason for the drop, based on the information provided.

However, one angle you could investigate is the effect of a disputed account on scoring.  Here's an article that discusses this point:

https://www.mint.com/blog/credit/what-happens-to-your-credit-score-when-you-dispute-items-on-your-cr...

If you have more information about what's been happening with your credit recently, someone might be able to offer you a better answer.

If you have a thin file, and something goes wrong with one of the positive accounts, then there might be a major score hit.

[cakebuilder]

this is a fascinating case, please update when possible

[ACG]

Thanks for your response on this; and the blog you sent was very insightful.

There’s a statement on there that says “The FICO score will not allow an item that is actively being disputed to harm your score.”

Which means, that my Fico should have remained where it was considering I had a previously reported 0 balance as it is now.

I called Customer Service and the rep i spoke to told me that filing a dispute shouldn't necessarily impact my Fico score.

She told me the main reason for this drastic drop happened because of the 0 balance that was reported from the Credit Bureau which i find hard to believe because my credit score across all agencies always goes up when i pay off my CC balances. I try to maintain a 0 or less than 2% utilization. I've asked around and everyone is dumbfounded about this.

[user5387]

Actual $0 balances on all accounts typically do hurt your scores, but it seems improbable that this would cause such a large drop.

When this has happened to me, I typically lose around 10 points.

[ACG]

Coming to think of it, capital one doubled my cc limit on the same card, earlier this month which i believe should have made a positive impact on this score as it did on the other bureau reports. 

[user5387]

How big is this card in the overall scheme of things?

What other cards do you have, and what is your overall utilization with and without this card?

[ACG]

This card had a $3000 limit that i rarely tap into. I also have 2 other cards which i've not used in a couple of months and they all have a 0 balance. Average overall utilization across the board is less than 5%. Exp score 693 TU 690 Eq 696.

[Imperfectfuture]

In therebuilding and cc boards, it has been reported that disputes affect your fico score.  I can attest to this.  Tu uses traditional on this site, barclay's pull uses tu08.  Tu through fico is 661, tu through tu08 was 586 (ouch).  The difference is what they look at.

Traditonal scoring dies not count any disputes,  I was getting ticked off that portfolio recovery was saying dispute in some collection accounts, until I realized they wern't calculated in the fico score.  The cc people noted that disputing trade lines dropped the score.  Disputing bad stuff, good. Disputing good stuff, bad.

If capital one is a primary account, then that dispute (until they remove the remarks, good luck) will lower your score.

Now some lenders out more weight in the risk assessment (08 scores).  Those scores are lower, and principally used for apps (my credit union uses traditional scoring).  Disputes are worse under that scenario.  They don't necessarily discount the baddies disputed, but will count the goodies disputed (more riskier).

No matter what capital one says, that dispute caused a score drop.

[Revelate]

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@Imperfectfuture wrote:

In therebuilding and cc boards, it has been reported that disputes affect your fico score.  I can attest to this.  Tu uses traditional on this site, barclay's pull uses tu08.  Tu through fico is 661, tu through tu08 was 586 (ouch).  The difference is what they look at.

Traditonal scoring dies not count any disputes,  I was getting ticked off that portfolio recovery was saying dispute in some collection accounts, until I realized they wern't calculated in the fico score.  The cc people noted that disputing trade lines dropped the score.  Disputing bad stuff, good. Disputing good stuff, bad.

If capital one is a primary account, then that dispute (until they remove the remarks, good luck) will lower your score.

Now some lenders out more weight in the risk assessment (08 scores).  Those scores are lower, and principally used for apps (my credit union uses traditional scoring).  Disputes are worse under that scenario.  They don't necessarily discount the baddies disputed, but will count the goodies disputed (more riskier).

No matter what capital one says, that dispute caused a score drop.

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Yeah, the statement that disputes won't be allowed to harm your score is likely general marketing from the theory people aren't going to be disputing things which are counting towards them positively.

In this case, I'd look hard at the other revolving tradelines and see when the last reported status was: if they're at six months or more, and the C1 tradeline is now in dispute (and it does get discounted anecdotally) then I could see the drop pretty easily.  If that were the case I'd simply go use the other cards to get them to trigger a status update as I'm not positive but FICO may discount a revolving tradeilne if it hasn't been used in six months... there's an inactive flag somewhere, and I suspect this might be it.

Not certain that 98/04 models behave differently than '08 models in this; disputes will do all sorts of stupid things with scores unfortunately.