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01-07-2013 07:04 AM - last edited on 01-07-2013 07:09 AM by llecs
Wait...so if I am reading all this right (and please forgive me, I am new here and not all that familiar with all the acronyms and phrasing) when you file a dispute, your score actually drops? Why is that? I don't understand how blocking a negative from being reported can LOWER your score...i would think that would raise it.
I don't understand what "rebucketed" means and how that is a good thing....my husband has had good credit his entire adult life, but three accounts that we show as paid in full have showed up as collections on his credit report (posted a question about this earlier). Seems like everytime we get one removed or adjusted, his score goes down. I am struggling to get the creditors to work with us...we are in this vicious circle of dispute/answer/dispute/answer....if they answer at all.
His score was in the mid 600's...dropped to 610 and just this weekend dropped to 599...and his "balances" increased even though he has NO revolving credit...the three accounts showing have long since been charged off so no way for additional fees to be added...is it possible that the disputes are bringing the score down temporarily, and once they are finally resolved, the score will go up again? Right now he has no revolving credit other than our mortgage. He wants to buy a new vehicle this year, and we plan to put a significant amount of cash down so the auto loan will be fairly low, but we don't want to pay out the yingyang in interest.
Would love some advice as he is getting really testy about this credit rating....
01-07-2013 07:09 AM
OP, I split your post to form a new one here. I had to edit the title, but changed nothing else. If you'd like to change the title, click "Options" and then "Edit Message". Had I left it in the original thread, posters would most likely be responding to the OP as opposed to your post.
01-07-2013 07:26 AM
I'd suggest reading the following:
Credit Scoring 101 - great for knowing what is in your credit score and to see how your score is impacted.
What Steps Do I Take - great for learning the repair process.
and Example letters - PFDs, GWs, DVs, etc.
Not all disputes will drop a score. When a dispute is filed, FICO will ignore certain aspects of OC accounts only. These include the balance, CL, and payment history. FICO will not ignore any aspects for CAs and PRs. So, if you have a CC w/ a late for example, and a dispute is initiated, then FICO will ignore the late and utilization of that CC. If the util helped more than the late hurt, for example, then you can actually see a score drop in that scenario. Conversely, if it's a loan or an old non-CC CO, then you could see a gain once the dispute comment appears. Once the dispute clears then your score could further drop or increase. It can drop because the comment can clear once verified and then the lates are scored once again. It's not uncommon for a baddie to update when the dispute clears and that can drop your score even further in some situations. For example, it's not uncommon for a baddie to add more lates. Or maybe they delete entirely and that can cause a negative impact on your score due to a dropping history and/or AAoA. Disputes aren't a very good idea and there are other steps you can take first if they are reporting incorrectly.
You cannot be rebucketed while an account is in dispute. However, once the baddie disappears, then you can be rebucketed. You can only be rebucketed if you are 100% baddie-free. If you have any major lates, COs, other CAs, judgments, liens, etc., then you cannot be rebucketed until those items disappear. Many who were rebucekted, present company included, have seen smaller losses (usually low double-digits). It's a good thing because your score can rebound faster and higher to where it was before.
FICO is complex and created scoring buckets. I liken it to college and that college professor who grades on a scale, if you ever had one. If everyone in the class tanks and does poorly, and let's say you are the highest grade at 80%, then under a scale-system, you have an "A" because you have the best grade, and everyone else follows in line behind you. Per FICO, the same is there. If the economy tanked, and everyone did poorly per credit, then not everyone will suffer the wrath of a lower score and those who tanked, wouldn't have tanked as far because of that scale. You and everyone are divided into scoring buckets. There's about a dozen of them based on the FICO versions in here. I think 14 in the newer versions, however we don't know precisely what those buckets are. So, someone with a judgment or BK reporting won't be scored on the same scale as someone with pristine credit. Likewise, someone with a young history at age 21 won't be scored the same way as someone with a 30-year history. If your DH has any baddies, he isn't being rebucketed. HE could if 100% of them are gone.
01-07-2013 07:47 AM
Crap...wish I'd known that the disputes weren't a good idea..I am working with the three accounts directly as well...although the circles they run you in are fairly dizzying...it just surprised me that his score dropped (technically, it dropped about 18 points so your response is about right in your estimation) when one negative was removed (and no, it was not an age of account thing as that was a fairly new one...miscommunication between me and a local credit union)....the three baddies on his account show as charge offs from back in 2007/2008...as far as we know, they were all paid in full, but can't get verification from the creditors to be sure we didn't miss something. One was mine that he was an authorized signer on that I messed up and allowed to go to charge off, but we paid it off. The other two were never late and paid in full on time (Dell and CapOne).
It also makes no sense that when he accessed his credit score on Saturday, it said "excessive use of revolving credit" when he has none...all of these accounts are old enough (I think) that they should not show as revolving at all....the mortgage is in his name alone, however...could that be what the notation means?
I just want the damn thing to start going up so he will quit whining about it!
01-07-2013 08:14 AM
If one of those charge offs is showing a balance and it WAS a revolving account, it is probably still counting that balance as revolving debt. You mentioned capital one. For example, you had a $1000 credit limit. Cap one charges it off after non payment at a balance of 1425. That makes your util well over 100% even though it is no longer an open revolving account. So, if you have an account charged off with a balance that was revolving, you will need to pay it off or you are always going to show that high util.
01-07-2013 08:19 AM
That makes sense...except that the balances have not changed since we began this process, and this is the first time he has gotten that notation...like I said, these baddies are all back in 2007/2008....I really am thinking that the disputes dragged him down. I think I will work with the creditor from now on and not file the disputes any longer as that seems to be hurting rather than helping.
01-07-2013 09:10 AM
From my experience with EQ, my score takes an initial hit when I dispute. Example: My score was at 667 and I filed a dispute. It dropped to 644 but as soon as the dispute was complete, it shot up over 700. I think it depends upon the individual situation, as this has been the case for me a few times during my rebuilding. I never get a drop with TU when I dispute. For me it's always worth taking a temporary drop when the dispute hits. Just my two cents.
01-07-2013 10:15 AM
When I dispute a negative item, and it is taken out of scoring, my score temporarily goes up.
When I dispute an item that is positive, it goes down. If these accounts that you are disputing are going down, then you can assume that if this account was not on your report, this is what your score would be close to. Keep in mind, if you are disputing hoping for a correction to the account rather than a deletion, that the score will bounce back up as soon as the account is back in consideration. Try to use GW letters rather than disputing if at all possible.