@Anonymous wrote:
What are the effects of disputes? And what types of disputes.
For example, I had a lender tell me that I had too many accounts that had the "Consumer disputes this account" notation on them (which results when you DV an account with the OC) and that those trade lines essentially get removed from the FICO scoring model. As such, I'd have to remove those comments. I did do that and I did receive alerts that noted those comment changes, but they did not have any score change as a result.
Then there are also TLs that I have disputed with the CRAs direclty. In speaking with the CRAs, they state that those types of disputed accounts do not have any impact on your score and that lenders don't have any visibility to those accounts that are being disputed until the results then come back and either change or don't change your file.
So in the first example, is what I have been told true? Are original OC accounts with disputed comments removed from the scoring model? I did attempt to have those comments removed by calling the CRAs and I told them that they are not longer in dispute. I think they removed some but not all of the dispute comments. Would this then be the real reason my score dropped so much? These are TLs that have had no activity for 3 - 4 years, so rather old...does this dispute comment change "re-age" the effect?
If so, would it help to re-DV them to add those comments back? The problem is that I was originally approved for a loan and had a 667 middle score. Now we are getting close to close and the lender re-pulled and I now have a 574....as a result, the terms have changed dramatically and I'd need to put another 10% down, which I don't have. The result of which would be losing my $20k earnest money and having to scramble to find some new rental home to rent in a short period of time.
OTher background. On my open active revolving I have about $9k of credit lines with balances between $0 and $300. I have several revolving charge offs from 3.5 years ago. No negatives for 3+ years.
1) Disputing can cause your score to drop. A dispute removes certain aspects on OC TLs per FICO like your balance or CL and that can negatively impact your score if it actually helped your util.
2) Disputing can lead to the early demise of an OC TL. While that may sound good if you have a CO or a TL with a bunch of lates, if that TL was one of your oldest or helped your AAoA, then it's depature can possibly drop your score if the history helped more than the baddie hurt. Also, some OCs will automatically remove the negative aspects at the 7 yr mark and it could have reported as a positive for a while longer.
3) Disputing can lead the OC or CA to report worse than what they were before. If an OC wasn't reporting every late or if the OC/CA had not updated in a while, then they can update their reporting and that can cause your FICO scores to drop.
4) Disputing will almost always lead to increased collection activity if the debt is unpaid, including increased letters, calls, or increased risk of being sued.
5) Disputing makes it harder to get a PFD or GW accepted. I recall calling for a GW for Verizon once and they said that since I disputed an accurate account then they wouldn't grant the GW (though I don't they they'd accept it anyway).
6) Disputing can lead to a fraud alert in some instances if you dispute as "not mine" (I'm sure it depends on the OC/CA).
7) Disputing takes too much time. Sending a GW or calling in a GW if paid or a PFD if unpaid takes a week tops. A dispute can take up to 30-45 days.
8) When disputing, you typically only have one shot before being labeled a "frivolous disputer" by the CRAs (EX in particular).
9) A dispute comment can lead to a mortgage denial. YMMV on the lender.
10) A dispute can lead to a split file (primarily EQ).
