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40 point Experian drop after a dispute. Is that normal?

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kcos194
Regular Contributor

40 point Experian drop after a dispute. Is that normal?

I recently opened a dispute with Experian about the balance on a closed account that I’m paying back as part of a judgement. The balance increased by $200 (which is accurate, the law firm added a $200 processing fee basically), and immediately after the dispute was closed my score dropped from 604 to 564.

Is this a normal drop for a balance increase like this? I also paid off a balance on another closed account to $0, so should I see a bounce back when that reports too? Just really frustrated that I worked hard to get that EX score up, and actually being honest with them about the balance seems to have really cost me.

Any advice? Thanks.
10 REPLIES 10
Anonymous
Not applicable

Re: 40 point Experian drop after a dispute. Is that normal?

What type of account is this?

A balance on a closed account is always viewed as a maxed out account. If that balance is increased the account would still be viewed as maxed out, so I wouldn't think the individual account here is what's hurting you. The additional $200 balance against your total limits could result in an aggregate utilization increase if we're talking a revolver here, but you'd have to have very small overall limits for a $200 balance increase against total revolving debt to raise your aggregate utilization enough to result in a 40 point drop.
Message 2 of 11
kcos194
Regular Contributor

Re: 40 point Experian drop after a dispute. Is that normal?

Sorry, I should’ve included that. It’s a Barclaycard, original CL was 2k. The balance was 2700 and change, increased to 2900 and change, so it was already 100% of my utilization. I also had a closed BofA card that had a balance of 112 on it which I just paid in full last week, so that one will show closed with a $0 balance when it reports again.

I can’t fathom how an increase in a balance that’s already 100%+ of the credit limit would be seen as a big enough negative to drop that much. For comparison, the same barclaycard account reports to EQ and per CK that score went UP 42 points (a PIF collection account also came off this week).

Strange, no?
Message 3 of 11
kcos194
Regular Contributor

Re: 40 point Experian drop after a dispute. Is that normal?

Should also mention my only open credit card account is a capital one QS with a $500 limit. So my total available credit line is only $500. That balance is at $89, so 18ish percent at the last statement date.
Message 4 of 11
Anonymous
Not applicable

Re: 40 point Experian drop after a dispute. Is that normal?

How many other (open) cards do you have? Can you list out their balances and limits? That will allow us to dig a little more into this.
Message 5 of 11
kcos194
Regular Contributor

Re: 40 point Experian drop after a dispute. Is that normal?

Yup, my fault I did that in a second reply. Only open card is QS with a $500 CL. $89 balance as of last reporting on 3/17. Has not yet reported again, will do so 4/17 obviously.
Message 6 of 11
Anonymous
Not applicable

Re: 40 point Experian drop after a dispute. Is that normal?

Sometimes when they update it will change the date of delinquency.
Let’s say the collection was 2 years old and they updated it, the “first” date of delinquency will remain unchanged, but the reported date will update to the current month. It makes FICO view it as a collection that just happened last month rather than a 2 year old one. The “fresh” collection affects your score much more.

I had it happen to me, disputed it, and it was removed. Although from what I understand if the “open” date hasn’t changed they don’t technically have to correct anything
Message 7 of 11
kcos194
Regular Contributor

Re: 40 point Experian drop after a dispute. Is that normal?

I could understand that if it were listed as a collection account, but it’s not. It’s a closed revolving account with a balance. The increase of the balance is the only thing that’s changed.
Message 8 of 11
Anonymous
Not applicable

Re: 40 point Experian drop after a dispute. Is that normal?

What is the limit on the BoA card?  I don't think you mentioned that.

 

Currently, your utilization is at $2900 + $122 divided by $500 (cap one limit) + Whatever your BoA limit is = X%

 

You said you just closed your BoA card, so that is going to report as such shortly.  Unfortunately, your scores may take another hit when this happens, as your overall utilization will be $2900/$500 or 580%.  Anything over 90% aggregate utilization wise is going to be viewed as maxed out.  While your one trade line is viewed as maxed out currently, aggregate (overall) utilization matters much more.  The amount of your BoA limit is crucial to determining your score drop already, but it's irrelevant once it reports closed as you'll be at maxed out utilization and probably see a greater score drop.

Message 9 of 11
kcos194
Regular Contributor

Re: 40 point Experian drop after a dispute. Is that normal?

Sorry you’re right, I didn’t mention that. It was a $300 limit, secured card. Card was closed but had incurred 112 of fees, which is what was just paid. Also, as per CK, EQ is reporting the exact same info with these 2 accounts as EX.

I get that part about the utilization, but why would Experian drop and Equifax go up when they’re both reporting the same thing on both accounts? Could it just be vantage score on CK vs FICO 8?
Message 10 of 11
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