Rebuilding Your Credit

[apandabear]

I've been in the rebuilding process for a very short period of time. I have been trying to clean things up, and I think I may have made things worse.

All of my baddies are 2-ish years old. I was hoping to see a boost in my credit scores soon, so I disputed (online) some marks that were incorrect. What I got was completely unexpected.

On a couple of accounts that have been closed for nearly 2 years, I have had "KD" added to April 2012. What the..?

Not only were the accounts paid or settled in 2010, they were also closed. I disputed to clean up the reporting, and I now have more KDs added, and so recently..!

I am beginning to get very frustrated... and sad. And I'm feeling defeated. Should I give the dispute a little more time to clean up..? I haven't received the "complete" email from EQ yet. I really don't feel like doing this all over again.

[RobertEG]

Unfortunately, that is one of the potential perils when you take action that requires a creditor or debt collector to do an account investigation.

By disputing, you are contesting the accuracy of reported information.  If they review your file and find any information that is currently not to date, even though not specifically related to the dispute, they can report so as to maintain accuracy of their information.

[apandabear]

But I guess my issue with it here is -- in the month-to-month reporting, a KD is listed for April 2012, when the accounts were closed/paid back in 2010. 

It doesn't make any sense to me...

[apandabear]

*Bump*

No ideas?

The dispute was finally closed. For an old account paid/settled in Oct 2010, a CO/KD was added for April 2012. For another account paid in full, the same thing happened. I re-disputed.

And this is just on EQ. Same thing happened to 2 different account on EX. 

How can the OC's do this? I settled these accounts almost 2 years ago, how can they report for 2 months ago?

[LIGHTNIN]

Who was the OC?

[RobertEG]

Closed accounts can remain delinquent, and thus continue to accrue delinquencies.

Many creditors will cease to report additonal delinquencies after account closing, charge-off, etc., but are not precluded from doing so.

[DaveSignal]

I have experienced this exactly.  The CRA is "verifying" that the account was KD on some date in 2010.  If the result of this verification is: yes, there was a charge-off in 2010, then this april 2012 verification results in the CRA marking 'CO verified April 2012", which puts a KD in your little box for April 2012.

This isn't really an issue as far as the CRAs are concerned.  They show the charge-off on the correct date in 2010.  They marked it still a charge-off in 2012 because thats what it was when the verified that the 2010 charge-off was correct.  They are reporting correctly.

The issue is how the imperfect FICO algorithm interprets this.  Sometimes, as it should, it will treat it the same way as before.  Other times, I have seen it cause a huge score drop and myFICO reports a recent major delinquency.

[apandabear]

Really? That's upsetting.

American Honda Finance and USAA (credit card)

So they can be completely satisfied in 2010... report "OK" or no data for YEARS, and then decide to insert one CO or KD randomly??

That makes no sense. Why pay or settle accounts if the OCs can continue to report negative information??

[apandabear]

Yeah, I got a drop in my FICO because of this.

But funny thing is, I didn't dispute in April. I disputed in May or June. So what gives?

[RobertEG]

The issue in reporting is the accuracy of its occurence, not the date it is reported.  The FCRA does not limit reporting of information other than it cannot knowlingly be inaccurate.