101 point drop from dispute?

[calyx]

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@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.

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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 )

[Anonymous]

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.

[calyx]

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@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.

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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.   

[Anonymous]

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@calyx wrote:

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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.  

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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.

[Anonymous]

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@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.

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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.

[calyx]

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@Anonymous wrote:

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@calyx wrote:

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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.  

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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.

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You're right.   Double whammy!