topic Re: 101 point drop from dispute? in Understanding FICO® Scoring

101 point drop from dispute?

Stugotsv10 — Fri, 02 Nov 2018 10:32:29 GMT

Working on a friends credit and saw something I have never seen before (of course its Equifax lol) disputed an item that is incorrectly reporting, via PHONE actually, so all of a sudden BOOM 101 point drop and literally the ONLY change is "remark added" which states dispute in progress????

anyone see this before?

Re: 101 point drop from dispute?

rbentley — Fri, 02 Nov 2018 11:23:00 GMT

Yes, this is happened to me, although not as significantly. My drop was only 8 points. In my case it happened from asking for a Goodwill adjustment from Cap1. They treated it as a dispute and marked my reports accordingly, resulting in a point drop.

This occurs because the FICO algorithm excludes accounts which are in dispute. Thus, you could either lose or gain points depending on how that particular account is affecting your reports. The good news is that the dispute language should be removed automatically at the time the dispute is resolved, usually within 30 days and your points returned to you.

Re: 101 point drop from dispute?

Anonymous — Fri, 02 Nov 2018 16:14:49 GMT

Usually this works the other way around, though. If one is disputing an account, most of the time it's due to something negative being present on the account. If it's a negative account, it should be adversely impacting that credit profile and if the dispute causes it to be excluded from the FICO algorithm, you'd expect to see score improvement if anything. A 100+ point swing can only come from one of two things, a major negative item (90+ day late, collection, etc) being present vs not present, or overall utilization going from perfect to maxed out or vice versa.

What is present on the account in question that you're disputing? Do you have any other accounts that are similar and/or how many dirty accounts do you have?

Re: 101 point drop from dispute?

Stugotsv10 — Fri, 02 Nov 2018 17:01:00 GMT

Government.

but they stopped reporting, so nothing "new" with them, just remaks, I know CK is not the best but under "whats changed" it says remarks" nothng else

Re: 101 point drop from dispute?

Anonymous — Fri, 02 Nov 2018 18:40:33 GMT

Since you referenced CK above, I should also ask if the score you're referencing is from CK as well?

If so, it's not a FICO score and can be ignored. Your CK scores could drop 300 points each and it would have no bearing on any lending decisions.

Re: 101 point drop from dispute?

Stugotsv10 — Fri, 02 Nov 2018 18:52:27 GMT

is it ever off by THAT much??

Re: 101 point drop from dispute?

Anonymous — Sat, 03 Nov 2018 09:03:35 GMT

is it ever off by THAT much??

Off from what, a FICO score? Yes, VS 3.0 scores can be off 100 points or more from FICO scores. Like I said above though, VS 3.0 scores don't matter since no one (other than you) will ever look at them or care about them. Going forward it would be a best practice to only look at your FICO scores since they are what's relevant.

Re: 101 point drop from dispute?

Jnbmom — Sat, 03 Nov 2018 09:14:42 GMT

Is the score from FICO or CK?

If it's CK than disregard you can't even remotely go by that score ........................................

Re: 101 point drop from dispute?

Anonymous — Fri, 04 Jan 2019 04:23:00 GMT

My score dropped 15 points ONLY because I opened a dispute. I called EXPERIAN (which I hate) and opened a dispute because there was a collection account that's supposed to be removed from my account. FORTY-FIVE minutes later: ALERT!!!SCORE DROPPED 15 points. Absolutely nothing else negative in my profile. This is nothing but a scam they're running. I scanned my credit and NOTHING ELSE COULD be the reason.

Re: 101 point drop from dispute?

Anonymous — Fri, 04 Jan 2019 06:16:45 GMT

I still think your score drop came from something else.

Re: 101 point drop from dispute?

calyx — Fri, 04 Jan 2019 13:25:05 GMT

@Anonymous wrote:
My score dropped 15 points ONLY because I opened a dispute. I called EXPERIAN (which I hate) and opened a dispute because there was a collection account that's supposed to be removed from my account. FORTY-FIVE minutes later: ALERT!!!SCORE DROPPED 15 points. Absolutely nothing else negative in my profile. This is nothing but a scam they're running. I scanned my credit and NOTHING ELSE COULD be the reason.

It's not the dispute itself, it's that the account is now no longer being factored and that has changed what the algorithm is using to calculate your score.

I would also be reluctant to say it's "nothing" else. There are so many moving parts in FICO that are unknown. People on this forum have done a great job with teasing out some of the likely milestones and factors, but there's just so much going on in the background and factors interacting that it would be hard to be sure nothing else *is* in fact going on.

As for 15 pts - that could easily happen - I disputed something on my oldest account and I believe temporarily lost points for a while because my AAoA calculation was lower. It recovered fine when the dispute was resolved (it was a detail on the account, not the account itself I was disputing).

You should probably ignore your scores (positive and negative effects) while you've got a dispute active - it only adds to the stress (ask me how I know )

Re: 101 point drop from dispute?

Anonymous — Fri, 04 Jan 2019 18:27:40 GMT

Thanks Kalyx. I hope I'm not being to naive here, but why not give me a 15 point bounce instead? I thought removing a collection was a "good thing" for anybody's credit profile. It seems inherently true that these scoring models are designed to punish people for 'good' and 'bad' financial deeds. It just defies common sense.

Re: 101 point drop from dispute?

calyx — Fri, 04 Jan 2019 19:49:00 GMT

@Anonymous wrote:
Thanks Kalyx. I hope I'm not being to naive here, but why not give me a 15 point bounce instead? I thought removing a collection was a "good thing" for anybody's credit profile. It seems inherently true that these scoring models are designed to punish people for 'good' and 'bad' financial deeds. It just defies common sense.

Removing a collection is a good thing. But shortening your visible credit history can be a bad thing. A shorter account history can indicate a higher risk than a longer history with an account that went bad years ago. It's not just about paying/not paying/owing debt, but how long this has been happening and how many accounts you've been managing (even if unsuccesfully). It's about evaluating risk for lenders.

To add to this, there is also the idea of bucketing, which means that they compare you against other borrowers; you might be put in a "better" bucket now. In the past you might be compared with people who have charge-offs - maybe your data looked better than most of those others, and now you are in a CO-less bucket and your data doesn't look as good compared to those others in the new bucket.

There are so many factors involved (account lengths, average lengths, amounts of money extende - borrowed, lent, and paid, and at what rate, numbers of accounts handled, stability, instability, etc), that we're just doing our best to try to tease it all out here in the forums.

Just remember FICO is an algorithm designed to evaluate a specific human behavior - it's not personal, it's not punishing you for mistakes, but assisting money lenders to determine what kind of risk you present to them, allowing them to decide if lending (extending credit) to you is feasible or profitable for their company. This is why it can be easier for people to get better credit deals with lenders that they already have an existing relationship with, or why connecting with a human underwriter for reconsideration can be successful.

Re: 101 point drop from dispute?

Anonymous — Fri, 04 Jan 2019 19:16:39 GMT

@calyx wrote:

As for 15 pts - that could easily happen - I disputed something on my oldest account and I believe temporarily lost points for a while because my AAoA calculation was lower.

Also by definition, this means your AoOA wa temporarily lower, which can many times be even more impactful than AAoA since it plays a role in score card assignment.

Re: 101 point drop from dispute?

Anonymous — Fri, 04 Jan 2019 19:20:20 GMT

@Anonymous wrote:
It seems inherently true that these scoring models are designed to punish people for 'good' and 'bad' financial deeds. It just defies common sense.

Good reply to your post above from calyx. Regarding what you wrote above, I really suggest that you adopt a different look on things, much of which calyx touched on in the reply. Continuing to possess your current outlook on FICO scoring is only going to hinder your growth and true understanding of how (and why) it all works.

Re: 101 point drop from dispute?

calyx — Fri, 04 Jan 2019 19:44:24 GMT

@Anonymous wrote:
@calyx wrote:

As for 15 pts - that could easily happen - I disputed something on my oldest account and I believe temporarily lost points for a while because my AAoA calculation was lower.
Also by definition, this means your AoOA wa temporarily lower, which can many times be even more impactful than AAoA since it plays a role in score card assignment.

You're right. Double whammy!