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Can losing dispute effect your credit? Opting Out of Credit Reporting Agencies Reporting Disputes?

Jazee
Regular Contributor

Can losing dispute effect your credit? Opting Out of Credit Reporting Agencies Reporting Disputes?

I read that losing a dispute can sometimes effect your credit?  I find that hard to believe!

 

I also read that you can "opt out" of credit reporting agencies so they don's share information like dispute history and other info that isn't pertaining to your account info on your credit reports.  Is that true? Good idea?  Easy / Hard to do?

 

Message 1 of 8
7 REPLIES 7
iv
Valued Contributor

Re: Can losing dispute effect your credit? Opting Out of Credit Reporting Agencies Reporting Dispute


@Jazee wrote:

I read that losing a dispute can sometimes effect your credit?  I find that hard to believe!


Opening a dispute can cause information on the disputed accounts to be temporarily not counted in scoring.

 

Once a dispute is resolved (either in your favor or not), the account (with or without corrections, depending on the results of the dispute) will once again be included in scoring.  Any of these changes (the dispute exclusion, removing the dispute, or correcting data) can certainly have an effect on scores.

 

(And if the dispute process causes additional negative information to be "corrected" onto your reports, or causes the DATE of negative information to be updated, yes, you could end up worse-off than before the dispute.)

 


@Jazee wrote:

I also read that you can "opt out" of credit reporting agencies so they don's share information like dispute history and other info that isn't pertaining to your account info on your credit reports.  Is that true? Good idea?  Easy / Hard to do? 


No, that's not true.

 

The closest thing to this is https://www.optoutprescreen.com - but that just removes your information from the SP lists sold to lenders for prequalified offers of credit. There's no method for hiding dispute comments from a lender, but still allowing account data.

 

Some people do recommend using the OptOutPrescreen prior to a large loan application (like a mortgage), if you suspect that you may have bad debt out there somewhere that isn't currently reporting to the CRAs, as collection agencies may subscribe to prescreen lists of "people with recent mortgage inquiries".  (In order to strong-arm you into paying them to avoid a collection showing up on your reports during the mortgage process.)  I don't know how common this is (if at all), but it does seem like an effective collection practice...

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Message 2 of 8
CreditGuyInDixie
Super Contributor

Re: Can losing dispute effect your credit? Opting Out of Credit Reporting Agencies Reporting Dispute

Hey Jazee.  Strictly from a practical perspective, the answer is not important, right?  You have exactly one negative item on your report (a collection for $86) which I believe you acknowledge as legitimate (and thus there's no reason to dispute it).

 

Just don't ever have a negative item again and you are likely to be fine (since negative items are the usually the only things people bother disputing, with a few rare exceptions).

Message 3 of 8
Jazee
Regular Contributor

Re: Can losing dispute effect your credit? Opting Out of Credit Reporting Agencies Reporting Dispute


@CreditGuyInDixie wrote:

Hey Jazee.  Strictly from a practical perspective, the answer is not important, right?  You have exactly one negative item on your report (a collection for $86) which I believe you acknowledge as legitimate (and thus there's no reason to dispute it).

 

Just don't ever have a negative item again and you are likely to be fine (since negative items are the usually the only things people bother disputing, with a few rare exceptions).


You made the wrong assumption that the dispute I was referring to was that $85 collection.  This particular report does not have the $85 collection but does have an old deliquent account I don't recognize but could have been something my ex-wife setup when we were married a long time ago. Essentially I don't have any "proof" it's not my account but there's an option on Experian to select the reason "Don't recognize account" Still looking for an answer to the original question which in a nutshell is, is there any downside to disputing it under that reason?  Thanks.

 

Message 4 of 8
CreditGuyInDixie
Super Contributor

Re: Can losing dispute effect your credit? Opting Out of Credit Reporting Agencies Reporting Dispute

OK.  In some of your other threads we have tried to find out whether you had any derogs, and the only one I think we heard about was the collection (I figured that out from a separate thread).  I think BBS asked if you had any lates and you said no.

 

So in addition to the two accounts you had told us about, there is at least one other account -- one with lates on it and which you do not recognize.  Are there any other accounts besides the CC, the auto loan, the old delinquent account you are not sure you recognize, and the collection?

 

I am asking because in the other threads we were trying to help you raise your score, and knowing about the derogs would have been crucial.  That's why BBS asked you about them.  His advice was all based on you having reports with exactly two accounts and no derogs.

 

You mention that you are still looking to an answer to your original question.  Contributor iv gives a pretty good answer.  The answer is usually you don't get hurt, but it can happen.  He gives you a couple examples of how.

Message 5 of 8
Jazee
Regular Contributor

Re: Can losing dispute effect your credit? Opting Out of Credit Reporting Agencies Reporting Dispute

The CRA with the unknown account doesn't have the $85 collection.  It's just that, my auto loan and my CC.  And that unknown account reported as deliquent and the high utilization on my CC (which I just took care of) are the only negative items.  All other closed accounts were paid in full. No late payments on anything. Just the one deliquent account.

 

 If the CRA cannot verify the disputed account with the lender, do they take the bigger picture into consideration to "guess" at whether the account is valid in the absence of any third party information pertaining to the account being disputed?

 

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CreditGuyInDixie
Super Contributor

Re: Can losing dispute effect your credit? Opting Out of Credit Reporting Agencies Reporting Dispute

No.  The CRA in that scenario deletes the disputed item.  But bear in mind that if the creditor says "yep, this account is real" or "yep, it really was late" that constitutes verification.  The creditor doesn't have to provide evidence.

 

 

Message 7 of 8
RobertEG
Legendary Contributor

Re: Can losing dispute effect your credit? Opting Out of Credit Reporting Agencies Reporting Dispute

A statement by a consumer that they dont recognize or dont recall an account is only a blanket assertion, and does not provide any supporting basis for the assertion.

The dispute process permits a CRA to dismiss a "dispute" as frivolous or irrelevant without any need for referral to the furnisher or any need for reinvestigation if it fails to provide sufficient information to permit a reasonable investigation of the accuracy of the information.

A dispute that simply states that the consumer does not recall the account could thus be dismissed as not providing sufficient information to permit investigation of the assertion.

 

The FCRA does, however ,include provisions for a consumer to rely only on assertions provided they back of that assertion with a sworn statement that has criminal penalties for knowilgly false statements.  That process does not require documentary support by the consumer, and does not include any involvement of the furnisher of the information or evaluation of proofs by the CRA, and is set forth in FCRA 605B.

 

More specifically, if a consumer is only relying upon an assertion of account not mine, they must back up that assertion by a sworn statement to that effect before a law enforcement agency in order to obtain block (removal) of the account based only on such an assertion.  The police report establishes basis for block of the information under FCRA 605B as opposed to investigation by the furnisher and CRA.

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