When you dispute through a CRA, they record this fact under field code 20 of your credit file, which is called the "Compliance Condition Code." It reflects the reporting of a condition that is required for legal compliance with the FCRA, such as disputes or accounts closed at the consumer's request,
This code is intially recorded for disputes to reflect the filing of the dispute. When the dispute is resolved, the compliance code is updated to reflect the outcome, So after resolution of a dispute, that information will be retained in your credit file.
FICO uses these codes to temporarily exclude certain items of account information from their scoring during the period that the Compliance Condition Code does not yet reflect the update of the resolution of the dispute.
As an aside, all of this may be avoidable if you use the direct dispute process, rather than disputing through the intermediary of a CRA. Direct disputes are unknown to the CRAs until such time as the credtior/debt collector reports some information related to the disptue. I dont belive that most creditors/debt collectors who receive a direct dispute take the time or effort to separately inform the CRA only of its filing. As such, entry of a Compliance Condition Code in your credit file amy be bypassed, and thus the need to update it once the dispute is resolved.
