@AndySoCal wrote:Any trade line that is disputed is not used in the FICO score calculation. Once it comes back out of dispute then it will be used again in the FICO score calculation. I also have heard of lenders not approving loans until all the disputed trade lines have been resolved.
Not entirely correct. It appears that there are two different types of disputes. One removes TL's from calculation, and the other doesn't. I don't know how the lender determines which type of dispute to report.
I have an accidental dispute on my Sears MC --it's been there for 2+ years after I asked for GW on a late. I can tell that that card is removed from consideration.
But in the past, I've had to dispute a store card with an incorrect balance, and although it was marked as disputed, it was still factored in. (I could tell because all the lates still reported, and the balance was included in my total balance.)
For anyone tempted to dispute everything in hopes of it being removed from scoring, be aware that it doesn't work that way. Not to mention that depending on the nature of the dispute, you might get fraud alerts and other fun stuff slapped on your reports. 
If it's not a genuine error, don't dispute. Just ask for GW (goodwill), or try a PFD if there's a balance due.
Yes, I have a source, and it's the myFICO admin. I don't know if that was on a post, or what, but it was in reply to my question about why on earth I wasn't being hit for the Sears late.
Also, I've seen it on my own reports. The Sears 30-day late does not show as a negative factor on my reports, which say that my most recent late is 5-something years ago. But the 5+ year old late was on another account. The Sears late occurred in spring 07. And this has been so since it first appeared. I immediately got an increase in all three FICO scores when the "dispute" first hit, and the newish late was no longer scored. But when I disputed the J.Crew card as incorrect balance (twice, because it wouldn't update my balance to $0 after I PIF'd), the 30-60-90 was still reported as a scoring factor. Only when WFNNB agreed to remove the lates, because they were over 2 years old, and all my reports had been clean for two years, did I see my scores jump from their absence. And it was a significant jump, because it took me out of the serious derogatory score bucket. Believe me, I would definitely have noticed an effect on my scores if those hadn't been counted while the dispute was going on! 
Both disputes were listed as "consumer disputes under FCRA" or whatever the jargon is. At any rate, they had the identical terminology.
Why they are different, I don't know. I suspect that that was Sears/ Citi's way of doing GW --they wouldn't remove the late, but they reported it as disputed, which it wasn't, so that it stopped affecting my scores. And the "dispute" was supposed to be resolved within 30 or 45 days, something like that, and yet, there it is, nearly three years later.
When you say, "There are three types of dispute by consumer, dispute under FCRA, and in dispute," what's the third type? I got lost there.
eta: Oh, did you mean "There are three types of dispute: by consumer, dispute under FCRA, and in dispute," with a colon or something after "types of dispute"?
FWIW, Experian says it's "in dispute under FCRA" TU says it's "Dispute of account information." Equifax says "Consumer disputes this account information." Dunno if that helps.