Dispute results score drop question

[pkenn]

Question... i disputed a charge

-off from 3 years ago that was sold (that  i paid off and is reporting $0)  and i got a notice today from equifax that the results are in and the tradeline has been updated and  added" to? 
So checked my score and i took a 34 point hit???  
The "updated" tradeline is exactly the same info as before disputing it verbatim .... what gives????

[FireMedic1]

First question. What were your disputing? Once you dispute an item. It comes back verified and updated as new even though it really isnt. So it looks fresh again. Only file disputes if it is totally inaccurate. If you were trying to get it removed. Really isnt going to work out in your favor.

[pkenn]

Ugh!   So it was actually my wife that disputed it (grrrr) it was a charge off from 2018 and it was a store card. I only have maybe two lates on my report form 4 years ago  and am at maybe 1-2% usage.

so does this me im stsrting over on clawing back up to where i was points wise or is it more or a immediate drop that will recover more quickly? 

[Mr_Mojo_Risin]

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@pkenn wrote:

Ugh!   So it was actually my wife that disputed it (grrrr) it was a charge off from 2018 and it was a store card. I only have maybe two lates on my report form 4 years ago  and am at maybe 1-2% usage.

so does this me im stsrting over on clawing back up to where i was points wise or is it more or a immediate drop that will recover more quickly? 

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The algorithm sees it as new, so it's going to take time to recover (profile dependent) it's anyone's guess how long.

I found this out the hard way before I found MyFICO.

[pkenn]

So isnt that like "re aging" almost?

that doesnt sound right. So if you try to clean up your report to say refi and this happens you get crushed 26 fico points for an older ding that hasnt changed at all except to be verified? I cant believe there is nothing to be done, it seems thst the algoryhm screwed up and people pay the price. Am i wrong?

[LooksAreDeceiving]

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@pkenn wrote:

So isnt that like "re aging" almost?

that doesnt sound right. So if you try to clean up your report to say refi and this happens you get crushed 26 fico points for an older ding that hasnt changed at all except to be verified? I cant believe there is nothing to be done, it seems thst the algoryhm screwed up and people pay the price. Am i wrong?

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The issue here isn't being punished for trying to "clean up your report."

You (or your wife) disputed a legitimate item that you knew was correct, in the hopes that it would be removed.  The dispute process is meant to resolve actual inaccuracies, not to be used as a Hail Mary to fix your credit.

Personally, I agree with the fact that charge-offs become recent when validated.  If this becomes common knowledge, perhaps it will limit those from clogging the pipeline with dishonest requests.

[Anonymous]

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@pkenn wrote:

So isnt that like "re aging" almost?

that doesnt sound right. So if you try to clean up your report to say refi and this happens you get crushed 26 fico points for an older ding that hasnt changed at all except to be verified? I cant believe there is nothing to be done, it seems thst the algoryhm screwed up and people pay the price. Am i wrong?

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Creditors are allowed to update a charge off each month until it falls off of your report. Many creditors do not report the charge off each month and this allows it to "age" as the last date a charge off was reported gets older and older. When you dispute a charge off the creditor investigates the account and update the information. If this account is verified then the information for that account is updated and the status is reported as charge off. There have been multiple instances where people have disputed valid charge offs and the charge off went from being dormant to being actively reported. Not only did that end up dinging their score, but it continued to keep their scores suppressed because the creditor started updating the charge off each month.

So it is not a flaw with the algorithm, people are just used to lenders not updating chargeoffs and getting the benefits of that chargeoff "aging".