On May 9, 2013, I checked my Trans Union FICO score on myFico.com. My score was a respectable 785.
Later on May 9, 2013, I asked my mortgage guy to run my credit so I could get preapproved for my loan. He ran my credit and told me my Lender score from Transunion was 739. Due to my preapproval, I made an offer on a new construction house and was required to put down a $6,000 non refundable deposit. The house is to be completed and I'm supposed to close on Sep. 3, 2013.
On June 11, 2013, I checked my Trans Union FICO score again on myFico.com. My score was 715 - a 70 point drop. I reviewed my credit report to see what changed and found that one of my lenders (HFC, aka HSBC and Household Finance Corporation) reported that I was 120 days late on my home equity mortgage. I knew this was wrong as I had never been late with them, and I had a $0.00 balance with them for several months.
When I called HFC, they told me that my account shouldn't be showing 120 days late because I had a $0.00 balance with them AND I had never been late with them. They told me that they would contact Trans Union and get the mistake corrected. After hanging up with HFC, I called Trans Union to file a dispute.
On June 18, 2013, I called Trans Union to check the status of the dispute. I was told that the dispute had been resolved and that the lender had agreed that the 120 day late was erroneous and it had been removed from my credit report.
Later on June 18, 2013, I checked my Trans Union FICO score for the 3rd time on myFico.com. My score was 736 - a 21 point gain from June 11th, but a 49 point net loss from May 9th.
Nothing else on my credit report has changed. In all 3 credit reports, every single one of my credit lines has a balance of $0.00, and I have 0 (ZERO) collections, charge off's, late payments, etc.
So due to HFC providing invalid and inaccurate information, I have realized a net loss of 49 points to my score. What a freaking scam.
If my lender's score goes down the same amount, I will have a new lender's score of 690. With my previous score of 739, I was able to get the 2nd best interest rate available through my lender, but now with a score of 690 I will have to pay a higher interest rate AND private mortgage insurance. With my previous score of 739, my APR was going to be 3.5% and my PMI rate was .0067 ((Purchase price * .0067) / 12) = monthly PMI payment. With my new score of 690, I will be paying 4.25% and a PMI rate of .0094.
The purchase price of my home was $307,000, so my old monthly PMI payment was going to be (307,000 * .0067) / 12 = $171.00/month. The PMI payment with my new credit score is (307,000*.0094) / 12 = $240.48. So, just in PMI alone, my payment has increased $70.00/month.
This is a freaking scam. I should not be held financially responsible for errors being made on my report by another company, but that is EXACTLY what has happened.
LAWS NEED TO BE CHANGED.
I would speculate that, once the dispute was resolved,the CRA did not remove the pending dispute flag.
That should be automatic, but the CRAs are notorious for not completing that admin step once they conclude a dispute.
With a pending dispute fllag still in place, scoring disregards certain OC items.
Has the pending dispute flag been removed?
Ok, so I called Trans Union and asked them if the pending dispute flag had been removed. The guy who I spoke with acted like he didn't really know what I was talking about, but said that the account is no longer in dispute and is no longer negatively affecting me. I asked him when that change was made and he told me it was done on June 13, 2013, which was before my last credit score run on June 18th.
So, everything was done and I have just mysteriously lost 49 points from my credit score.
LAWS NEED TO BE CHANGED.
I posted about this same issue about 2 weeks ago. Credit scores and reports are such a scam! At least for you, you have time to let things settle out. My scenario was a judgment was passed against me for something bogus by the NYS Tax Dept. I got them to vacate the judgment but there was a 70 pt drop in my score as well. I got all 3 credit bureaus to remove the incorrect item, yet there was only a 15 point improvement in my score..
If you haven't pulled the actual report yet, you should. When you get the item removed, you can get an updated report from them CRA for free. I got it from Transunion, Equifax and Experian. All of the reports were fine, no judgment, no dispute, but like I said, only a small, tepid recovery in score.
At least for you, you have about 3 months to get this rectified. My house which I was building was supposed to close on June 19th. In terms of credit recovery, fortunately for us, the house has been delayed till about mid-July. I am hoping, in the next 3 weeks, as the month turns, I will get at least 20-30 more points back.
Credit is a scam and so are sites like myFico when they charge you a lot of money for reports and scores that they say are the one, true score. But even those "true" scores vary from place to place depending on which scoring model they use.
Good luck with your situation, make sure that everything, all disputes, and mentions of the late item on your report are removed. Also, keep your utilization super low, like at 1%, and hopefully over time the scores will rebound.
it sounds like you got 'rebucketed' by the false information, which is possible why that old late is now hurting you more than it was. If this is the case you should get put back in the 'bucket' you were in before, and your score will go back to where it was, but this doesn't happen overnight,,,
I expect that when mistakes are made, there will be absolutely no negative impact. None. Nada. Zip. Zilch.
There should be a REQUIREMENT that either lenders or credit reporting agencies notify borrowers to let them know that negative information has been reported, and give an opportunity for the borrower to dispute the negative information PRIOR to the invalid/inaccurate negative information having a negative impact to their score.
Since THAT doesn't happen, then it should be REQUIRED that there will not be ANY negative impact to the borrower when invalid/inaccurate information was added to their report and subsequently removed.
But THAT doesn't happen either. Credit scoring is just a HUGE SCAM to TRY to ensure that everyone's credit scores stay low so lenders can charge higher interest rates and make more money. This whole SCAM is a totally self-serving system, and it ONLY works to the benefit of the financial institutions.
I've also read that I have absolutely NO RIGHT to sue for any damages done. Again, what a freaking SCAM. Financial institutions are allowed to do whatever they please, but yet they are not held ACCOUNTABLE for their actions. Google "Private Right to Act" + "FCRA" and you will see that I'm right. When you get bent over by one of your lenders, there's not a SINGLE thing that you yourself can do. You can PLEA to your Senator (which in most cases will get you NO WHERE FAST because those same financial insitutions are paying your Senators), plea your Attorney General, plea the FTC, plea the Consumer Financial Protection Bureau, complain to the BBB, file a lawsuit, and at the end of the day you just have to take it. Not a single thing that can be done. That, my friends, is a SCAM, and the federal government has set this system up to PREVENT retribution (Punishment that is considered to be morally right and fully deserved) to the lenders.
But, more than likely, consumers will go on throughout their day and not complain, not call their Senator, not demand change, so therefore everyone will be forced to continue just "taking it".
I hate this system more than anything in the world and I'm doing plenty to make and demand changes. Others need to step up.