Score drop for no reason?

[ubermensch]

I got a Score Watch alert today that there was a "change to an existing account" and that my "credit score had entered a new score band".  Woo hoo!  I was excited that one of my derog deletions had hit and my FICO score had increased more than I could have ever dreamed.  My dream quickly turned into a nightmare when I logged in to see that my FICO had DROPPED 20 points.  I looked to see what accounts had changed and it said:

The following changes were reported for your VERIZON WIRELESS account:- Past Due Amount Changed from N/A to N/A

Uh, this doesn't look like much of a change?  And certainly not enough of a change to warrent a 20 point FICO drop!  Looking at the other details for this account, it didn't appear as if anything had changed except the comments.  This is a account with Verizon which is paid in full (has a 0 balance) with the status "placed for collection."  It does not appear as a collection but rather with other credit accounts.  I disputed this account online over the weekend on the basis that I was told it would be deleted after I paid.  The "reinvestigation in progress" now appears in the account comments.  What's going on here?

[RobertEG]

While the dispute is in progress, FICO does not score it.  Its prior existing status as a collection is a major score hit..... 

If they agree that it was not legit, and delete in from your report, then it will do no harm, other than waitting for the deletion and restoration.

You just have to make sure that it is deleted, when resolved. 

Then you will restore your prior happy feet. 

[Anonymous]

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RobertEG wrote:

While the dispute is in progress, FICO does not score it.  Its prior existing status as a collection is a major score hit..... 

If they agree that it was not legit, and delete in from your report, then it will do no harm, other than waitting for the deletion and restoration.

You just have to make sure that it is deleted, when resolved. 

Then you will restore your prior happy feet. 

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Since the account was removed from FICO scoring when it was marked as disputed, and the OP lost 20 points when that happened, deletion of the account will NOT restore the 20 points.  Right now, the report is being scored as if the account in question didn't exist at all, and if the account is deleted due to the dispute, it will continue to be scored that way.

Yet another case of "be careful what you dispute because it may be helping more than it's hurting."

[ubermensch]

How could an account that only had the "in collection" status be HELPING my FICO score?

[Anonymous]

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ubermensch wrote:

How could an account that only had the "in collection" status be HELPING my FICO score?

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Age of accounts, maybe?  Credit mix?

If it is an OC tradeline as opposed to a CA, it counts for both of those factors, even when marked as "in collection."

[ubermensch]

Wow, you learn something new every day.  Now I can only hope they deny my dispute!  Thanks for the info. 

[Anonymous]

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ubermensch wrote:

Wow, you learn something new every day.  Now I can only hope they deny my dispute!  Thanks for the info. 

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I'd think of it as a win-win situation actually.

If the account is verified, you should get your points back, all else equal.

If the account is deleted, you will have a cleaner report for manual review.  That's almost worth those 20 points IMO.