cancel
Showing results for 
Search instead for 
Did you mean: 

Dispute status causes exclusion from FICO scoring

Super Contributor

Dispute status causes exclusion from FICO scoring

So I have unauthorized charges in dispute on a CC account and I was under the assumption the balance would not be reported to the bureaus due to the dispute status of the charges.
Since this revolver would otherwise be reporting zero, a balance being reported would cost me a penalty. So I called the CCC to confirm no balance would be reported, since the entirety of the balance was in dispute.
I ended up speaking with the internal credit bureau department who advised me that whether an account is in dispute is reported to the bureaus as well.
Supposedly the effect is the bureaus pull that account out of play for FICO scoring purposes for that profile while it is in dispute, because the bureau does not know the specifics of the dispute. In other words, it’s temporarily as if that account did not exist; it’s effectively suspended from effect.
So I was worried a balance appearing would adversely affect my score by raising my utilization percentage when in reality my score may be affected, but for a whole different reason. My credit limit for scoring purposes will be reduced by the credit limit of that account while it’s in dispute. So this will raise utilization, but not because it’s adding to the amount owed, but because it’s reducing the amount of credit per FICO.
Has anyone ever heard of this before?
-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. Highest from under 5%>48%, Accts: 1/21>10/21, $6,137. Dec 2020, (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.


RIP:
(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
6 REPLIES 6
Moderator

Re: Dispute status causes exclusion from FICO scoing per Chase

Posts have been removed and the thread is now open for new replies.

 

Just a remider that we can't discuss providing false information to a credit bureau for any reason.

 

--UB

Message 2 of 7
Super Contributor

Re: Dispute status causes exclusion from FICO scoring

Sounds to me like a reasonable way to handle the situation, for the bank reporting and for the bureau display and FICO calsculation.

 

A dispute could arise for any number of reasons. 

 

Example 1 - Does the cardholder dispute whether they missed all those payments? Until that gets sorted, don’t include the payment history at all in the score, exclude the balances involved and the credit limit. 

 

Example 2 - Does the cardholder believe this balance is fraud? Exclude the balance, the limit, and all history. 

 

Scoring relies on automated algorithms, and massive data feeds between the CCC and the bureaus. Excluding a specific component of your exact dispute detail is not something that can be done easily. 

 

Once the dispute is sorted, your history, CL, and balances will be included in scoring again.  

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
Message 3 of 7
Established Contributor

Re: Dispute status causes exclusion from FICO scoring

When I recently disputed an old, closed mortgage account on my EQ report, Credit Karma reported that the account had been deleted from my EQ CR. My EQ Vantage 3.0 score jumped accordingly. 

 

However, for several weeks I checked the EQ website directly to see if the old account had actually been removed from my CR. Nope, it wasn't and there was no bump in either my EQ FICO score or my EQ proprietary score!

 

The motto is: Don't believe every deletion you see in response to a dispute. Some of them may be phantom deletions!

 

Message 4 of 7
Super Contributor

Re: Dispute status causes exclusion from FICO scoring

@ridgebackpilot: it should’ve temporarily raised your FICOs as well.
https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Approved-with-inflated-740-fico-because-...
-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. Highest from under 5%>48%, Accts: 1/21>10/21, $6,137. Dec 2020, (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.


RIP:
(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 5 of 7
Established Contributor

Re: Dispute status causes exclusion from FICO scoring


@Birdman7 wrote:
@ridgebackpilot: it should’ve temporarily raised your FICOs as well.


I was expecting that, but it never happened. Not sure why Credit Karma would have reported that an account was deleted but not FICO?!

 

Message 6 of 7
Super Contributor

Re: Dispute status causes exclusion from FICO scoring

Weird
-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. Highest from under 5%>48%, Accts: 1/21>10/21, $6,137. Dec 2020, (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.


RIP:
(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 7 of 7
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.