ScoreWatch 13-point drop-disputes causing?- help!

[madredejames]

I received an email from ScoreWatch today with an alert. I was hoping it was that my score had gone up, as I just paid down my two credit cards (total CL of $800) to below $30 each. I had been near my CL before paying these 2 accounts down. Well, that information hasn't factored into my score yet.

I was alarmed to see my FICO score had dropped by 13 points. Before I found this forum and myfico, I had signed up with one of those credit repair services (not a good choice, I know now.) Shortly after signing up with them, I canceled my account, but apparently they had already sent some disputes on my credit report. The disputes are the only change showing on my credit report. I am wondering if these disputes actually made my score drop, based on the way the information is being reported?

Here are a couple of examples. I am thinking that the score drop could have come from the change from "amount in high credit is charge off amount" to "amount in high credit is credit limit"? 

If so, what can I do about this? Is there anyway to remove disputes? Unfortunately, I had started the credit repair thing before I met with a mortgage broker. He looked at my report and gave me some recommendations. He said it was best not to have disputes on there and to remove them.

Any advice or helping me understand this is much appreciated. I am trying hard to do things right.

EMB/BELK  (XXXXXXXXXXXX0504)

Show/Hide Details

Account opened: 7/2007
Description: Consumer disputes - reinvestigation in process
Amount in H/C column is credit limit

	Previously reported	Newly reported
Balance:	$0	$0
Past due:	$0	$0
Status:	Bad Debt; Placed for collection;	Bad Debt; Placed for collection;
Last activity:	11/1/2007	11/1/2007
High credit:	$303	$500
Description:	Account transferred or sold Charge off account Amount in high credit is original charge-off amount	Consumer disputes - reinvestigation in process Amount in H/C column is credit limit

Another example:

MERRICK BANK  (XXXXXXXXXXXX2073)

Show/Hide Details

Account opened: 4/2007
Description: Consumer disputes - reinvestigation in process
Amount in H/C column is credit limit

	Previously reported	Newly reported
Balance:	$0	$0
Past due:	$0	$0
Status:	Bad Debt; Placed for collection;	Bad Debt; Placed for collection;
Last activity:	9/1/2007	9/1/2007
High credit:	$1,891	$1,500
Description:	Settlement accepted on this account Charge off account Amount in high credit is original charge-off amount	Consumer disputes - reinvestigation in process Amount in H/C column is credit limit

[Anonymous]

When I disputed my items it caused the same thing, my score dropped, they actually told me that  I should not dispute but let the bureau's run there course, and let the reports update on there own.

[madredejames]

Just curious, when you say "they" told you, who do you mean?

Anyone else know, is there a way to fix this?

[Anonymous]

Well, I contacted Equifax at first, and they stated that they had nothing to do with the scoring, and to contact FICO, which I did. So, and FICO rep. told me over the phone about how I should not dispute my reports.

[llecs]

OP, aside from these two, were there any other accounts you disputed?

Is there a CL showing on the GEMB or Merrick accounts? If so, what is it?

[madredejames]

Yes, there are a total of 6 accounts in dispute that ScoreWatch is showing. Apparently, the credit repair company sent these 6 disputes before I canceled my account with them. Four of  the 6 disputed records now say "Amount in H/C column is credit limit." That is new. That is the only difference that I can figure out that would have made my score drop.

On the GEMB/BELK account, it has $500 in the "High Credit" column, and the notation, "Amount in High Credit column is credit limit." So I am interpreting that as saying the CL is $500. The same thing with Merrick, it's saying $1500 is the credit limit. However, GEMB/BELK was a charge-off which says it was transferred or sold. And Merrick was an account that we settled a long time ago (a year or so.)

The other two accounts now showing an amount as "Credit Limit" were charge-offs.

This is very confusing and stressful...I wish I had found this site before I did anything else. :-(

[llecs]

There can be several things at play here. In a dispute, for OC accounts only, certain aspects of a TL are removed while in dispute like the balance and the CL. So, if you X-out and CC TLs you disputed, and if your util on your other non-disputed cards is higher than what it was before the dispute, then that can cause your scores to drop.

Also, a dispute can cause certain fields within a TL to update making it appear as a newer collection and that can cause a score drop. In some cases, a dispute will result in added lates or other baddie references which could hurt once the dispute clears on any given TL. IMO, disputing is bad and so are credit repair companies...for these reasons. In my early days, I disputed everything and regretted it.

[madredejames]

Thanks for helping me understand what is impacting the scores.I have totally learned my lesson re the credit repair industry.

What's my best course of action? Is there anything I can do to "undo" the dispute? (I know, probably not, but thought I would ask.)

Or should I just see what happens as a result of the disputes and go from there? Is there any chance any of the situations will correct themselves? For an example, an account was really settled just going back to showing as settled and not having a CL showing?

Is there anything else I can do to improve my score? Trying to qualify for FHA mortgage this summer.

I have two credit cards, one with a CL of $500 and one with a CL of $300. I've never been late on these. I recently paid them down from using a high % of my total CL to having a balance of about $20 each (mortgage broker said not to pay down to zero, to leave a small balance.) These payments have not had time to affect my score yet. T

Should I ask the CC companies to raise my CL? (or could that backfire and also lower my score?)

Thanks for the help!!!!

[llecs]

I would let the disputes settle. AFAIK, I don't think there's any way to reverse them. There might be some auto-correction if verified and if not, there are steps you can take to bring your scores back up. I recommend reading the following:

Common Abbreviations

Credit Scoring 101 - great for knowing what is in your credit score and to see how your score is impacted.

What Steps Do I Take - great for learning the repair process.

and Example letters - PFDs, GWs, DVs, etc.

I don't know what else you have, but you could send a GW letter to Merrick and GEMB and ask them to remove any lates, to remove any comments like "charge-off", or even delete. If they do any of these, you could see a gain. If you want it deleted, be sure to weigh its age in relation to over all AAoA. Last thing you'd want is to have one of your oldest deleted and that can cause a drop in some situations.

Raising CLs can help if you are carrying balances, but paying down revolving debt is the fastest way. When you ask for a CLI, some creditors will pull your credit.

[LS2982]

OK im not understanding the whole "credit repair company is bad" arguement. They are doing the same thing you would do if you had the time and patience to do it. That's all. Some people (like myself) get bent out of shape dealing with CA's and OC's and would rather have a company experienced in handling those type things do it for them. I mean to each is own but I don't see where they are "bad" at all, if you have the money to pay them it's your own call ya know? THe big thing is you need to pay off your debts before they dispute, so the CA doesnt have a leg to stand on as far as re-submitting the collection.