Credit dispute dropped my score 50pts!

[AllZero]

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@Anonymous wrote:

My credit report last month had this same account but was at the bottom of the history. Checked again bc my discover fico number took a dip on the latest statement. When I pulled credit, this 5 year old account was not the most recent. I read that by law a dispute cannot damage your credit, but clearly this did because the only difference I had from last months report to this month was opening a secure credit card with discover. And that was only a soft pull and $200 limit which I'm at less than 10% utilization 

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IIRC

If on a derogatory score card, one does not get penalized for new account opening.

If on a clean score card, yes you could get new account score penalty.

[coreysw12]

I had this happen recently. I disputed all of my bad accounts with the credit bureaus, not knowing any better at the time, and it caused my "most recent late payment" date on EQ to change from 20 months ago, to only 3 months ago. My EQ score tanked as a result.

But within about 3-4 months, it bounced back. My EQ is still showing that my most recent late payment was well over a year after my actual most recent late payment, but it doesn't matter any more, as enough time has passed.

My guess is, by October it won't be affecting your score much, if at all, anymore.

[Anonymous]

Is EQ the only agency this happens with? I disputed a Cap One balance that was not reporting correctly through Cap One. I was told it was an error on their part and they would fix it. The account was CO but should have reflected a $0 and was damaging my UTI.

Cap One updated the balance but the EQ report also reflected the same date of the chages as the most recent late payment. The balance was corrected on all reports...but EQ changed the late. AND....they applied that date to my other Cap ONe account also...so now it shows as both accounts were 30 days late in Feb of this year. I havent been late since Oct of 2017. 

[Anonymous]

well I think I panicked for nothing. 

turns out what I looked at was my fico 9 score vs my fico 2,4,5 what lenders use. 

it also turns out that my TU score went UP by about 20 and my EQ 10. My EX only has gone up a point from when I last checked last month. 

so tldr; fico 8 is VERY different from fico 2,4,5. 

[Anonymous]

As stated up thread, when you dispute an old late that has not been updating, it causes it to be updated. The fico algorithm doesn't look at the DOFD, it looks at the last date updated for how recent the delinquency was.

@AllZero Is correct there is no new account penalty on a dirty card, just potential aging and utilization changes.  

If you did not see a score drop by it being updated, I would be very surprised, Unless it had been updating constantly all the time.

Are you sure you are referencing the same version fico score before and after from the same bureau?

And to a question posed earlier, fico licenses it's algorithm to each credit bureau who then upon request runs your data through the algorithm which then produces the score. Which algorithm is used depends on which algorithm the lender requests.

[bzbigsis]

This just happened to me today! A paid closed account showed paid, 90-120 days late and it had never been late, I even called the original creditor to confirm, so I thought that disputing it and having it report accurately would advantage me. Not true! My Experian dropped 23 points today (I disputed yesterday). Let's see what happens with the others. It's bad enough the Equifax dropped 17 points due to all student loans updating their status as a result of COVID. Ugh!

[Anonymous]

Welcome to the forum @bzbigsis Wait a minute, don’t get too excited. Whenever you dispute something, it is temporarily suspended from use in the generation of your score. So if nothing else caused changes, that’s what would happen if the entire account were deleted, not corrected.

So until the dispute is completed, it is taking away the late AND any other benefits/detriments of the account’s other attributes such as age, utilization, CL, etc... So be patient, let the dispute run its course, and then when the dispute is done, you’ll find out the true result.

If they correct the error, your score should go up. If they don’t correct the error and the TL is simply updated AND it has not been updated in a long time, then you will most likely see a score ding because the update will cause the TPOD (total period of delinquency) to increase, where it was previously frozen.

By the way since you’re new, you may want to read this:

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/General-Scoring-Primer-and-Version-8-Mas...

Look forward to your future posts.

[bzbigsis]

Thank you so very much. I am doing my best to rebuild and that was my only score in the 600s, but I will continue to press through. I appreciate your encouragement!

[Anonymous]

You came to the right place. You have got so many kind, knowledgeable, helpful members here that are willing to listen and talk to you and explain and share their knowledge and experience. You are surrounded by many people who have successfully completed rebuilds themselves and some that are in the middle of doing so. You’re in great company and in the best place you could be for your goal.

You have found the resource for all the knowledge that you need. Keep up the good work and you will do well, I have no doubt.

Just remember it’s a marathon, not a race. It will take time, but if you follow the wisdom of the forum, you’ve got nowhere to go but up!