Score dropped 30 points just from initiating a dispute?

[dethkultur]

Hi, I just signed up for a score watch account last month. It is way more useful than I expected as I try to clean up my credit.

My starting score when I signed up was 652, and since then I intiated two disputes with EQ online, one with a collection account, one with two old chrageoffs. Here are the results so far:

- Offline dispute for a medical collection (5 years old) - item was deleted. FICO change - none, up or down.

- Collection company deleted their $10,000 item due to no paperwork an a 6 yr old account. FICO change - none, up or down.

- Disputed 6 yr old CC chareoffs - the next day (Christmas Day) I get a Score Watch alert the next day saying they are being disputed (resluts due in the next 30 days), and my score drops to 623!

The item is not closed - I haven't received a response back. What Scorewatch says is 

Consumer disputes - reinvestigation in process

Amount in high credit is original charge-off amount

On one account, the "high credit" was $3500 before this dispute (and has been for years), which I assume was the credit limit. It got reset now to the charge-off amount (about $2300). It wasn't changed by the Bank, but by EQ, as it is still in dispute (as noted in the message).

What gives? Can I do something about this? Should a score drop like this just from initiating a dispute, when a resolution isn't even received yet? And on a 6 year old account? This is isolated - there are no other changes.

[llecs]

A dispute to a CA or PR will not impact your FICO score. A dispute to an OC can impact your FICO score. A dispute excludes certain aspects from FICO scoring of an OC account like the balance, CL, and payment history. Per CCs, the CL and balance, even if they report, are X'd out of FICO scoring while the TL remains in dispute. If the CC helped your utilization, for example, then the score drop will remain for as long as it reports as disputed (about 30 days at a min.). Also, the TL can update in a way to impact your score in other ways. Sometimes, the TL's dates will update under a dispute and that can cause a score drop. Some creditors will actually add lates or other baddies or comments while under a dispute and that can drop your FICO scores too. You'd want to compare line by line to look for any other changes. BTW, SW throws out general ideas as to why your score dropped. Make sure nothing else changed like balances, utilization, history, dropped baddies, etc. as those can impact your score.

I would wait until the dispute resolves before worrying about any score changes. Once the TL changes back, then you'll have an idea of where the score stands. Be sure to update your Target score to match your latest score to get alerted to any future score changes. In the future, even if you are beyond certain it isn't reporting correctly, avoid the temptation to dispute. Bad things can happen, plus it makes it harder to repair later.

[dethkultur]

This wasn't a dispute to the CA, it was to the CRA (EQ), and just starting the dispute hit my score like this. The CL was on a charged off account, so I don't see how it would change any utilization.

And about your comment - "In the future, even if you are beyond certain it isn't reporting correctly, avoid the temptation to dispute." - huh? Why does this forum, or information for credit repair even exist? What else are you supposed to do with incorrect information on your credit report if you don't dispute it? Just wait around 7 years for it to fall off? 

[Anonymous]

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@dethkultur wrote:

This wasn't a dispute to the CA, it was to the CRA (EQ), and just starting the dispute hit my score like this. The CL was on a charged off account, so I don't see how it would change any utilization.

And about your comment - "In the future, even if you are beyond certain it isn't reporting correctly, avoid the temptation to dispute." - huh? Why does this forum, or information for credit repair even exist? What else are you supposed to do with incorrect information on your credit report if you don't dispute it? Just wait around 7 years for it to fall off? 

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Disputing throughthe CRAs, when inaccurate information is reported on your credit reports, should be an step of last resort. You'll frequently get the automatic "verified" and the old "frivolous dispute" if you keep at it. If the information reported is really inaccurate, a direct dispute with the data furnisher is more likely to yield the desirable results. Or, at least, not garner the automatic "verified" of the CRAs.

[dethkultur]

I asked for validation with the creditor directly, and I didn't receive a response after 30 days (and still haven't received one at all), and the item is still on my report unchanged. What should I do after that?

And it certainly isn't frivolous. I only disputed one other item through the CRA, and it was resolved in my favor. 

[Anonymous]

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@dethkultur wrote:

I asked for validation with the creditor directly, and I didn't receive a response after 30 days (and still haven't received one at all), and the item is still on my report unchanged. What should I do after that?

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Head over to the Rebuilding Your Credit forum, give us the full low down on the account, what's reporting, who is reporting, etc... And, what you've done so far. One think that stands out is that you say you asked for validation with the creditor. The original creditor? If so, you don't DV an OC like you would a CA. So, more details will help us help you sort it all out.

[dethkultur]

Thanks, I might try that.

My question was about scoring though. And how there doesn't seem to be any information anywhere that simply disputing an item can significantly impact one's score, even when you may be in the right. That seems to be worthy of noting to people that are concerned about their scores. People in this forum would be included in that population. 

Still, no one has said "yes, that happened to me before," or "here's how to make sure it doesn't happen again" or "here's how to fix it" or "maybe this should be added in a FAQ somewhere because yes, it makes sense that your score shouldn't fall during a dispute." Instead, it's been completely ignored, and 2 moderators have chosen minor points to point out and reply with "don't do that" that had nothing to do with scores, and based on assumptions that turned out to be incorrect about my noobness to some of these processes, or who or what I disputed. No comments about a score change that happened under circumstances that I wasn't able to find mentioned elsewhere on this very board. It may be there, but I couldn't find it. I'm still blown away that a moderator would say flat out, without qualification, to not dispute ever.

[llecs]

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@dethkultur wrote:

My question was about scoring though. And how there doesn't seem to be any information anywhere that simply disputing an item can significantly impact one's score, even when you may be in the right. That seems to be worthy of noting to people that are concerned about their scores. People in this forum would be included in that population. 

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On that CO, what is the listed CL and what is the balance? What kind of CC was it?

Do you have any other open CCs reporting, or closed CCs with a balance?

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@dethkultur wrote:

Still, no one has said "yes, that happened to me before," or "here's how to make sure it doesn't happen again" or "here's how to fix it" or "maybe this should be added in a FAQ somewhere because yes, it makes sense that your score shouldn't fall during a dispute." Instead, it's been completely ignored, and 2 moderators have chosen minor points to point out and reply with "don't do that" that had nothing to do with scores, and based on assumptions that turned out to be incorrect about my noobness to some of these processes, or who or what I disputed. No comments about a score change that happened under circumstances that I wasn't able to find mentioned elsewhere on this very board. It may be there, but I couldn't find it. I'm still blown away that a moderator would say flat out, without qualification, to not dispute ever.

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I'll qualify myself by saying it....It happened to me too. I was a new at repair about 3 years ago or so and someone gave me the advice to dispute everything. It was the dumbest advice I ever received and it hurt my FICO scores and made it harder to fix my credit. Other bad things happened too and won't repeat those here, though. To echo of LilMirth, disputing inaccurate stuff should be the last thing you'd ever want to do for a number of reasons..w/ potential score drops being one of them.

If you could turn back time, and redo everything, the best course of action is to look at the TL in the CR(s) and determine if it is reporting incorrectly. If it is, then maybe a dispute would have been warranted. However, if the account is bad, you don't want to fix its reporting, but ideally you'd want it deleted instead. The best course of action with a reported CO w/ a balance is to send the OC a PFD letter. Basically you are asking them for a deletion of that TL in exchange for a payment. If they say yes, then you'd pay it and they'll delete. Or maybe you wouldn't want it deleted because of the length of history. If that's the case, then you can alter the PFD letter to specifically mention that they remove this late or that late in exchange for a payment. If they say no to the PFDs, then you can always PIF and then send them GW letters asking them to remove specific negative info.

Going forward, you can't reverse the dispute process. You have to let it play out. If you call the CRA they'll only prolong it (up to 15 more days). After it clears, then recheck your scores and make that judgment call to see if you want to reapproach this or not. Without knowing more info, it sounds like certain aspects of the CO are helping your FICO score more than the baddie of the CO hurts. I suspect it lies with the balance and even maybe the "high balance", though I bet a CL is listed somewhere in there. 

[ficonightmare]

The only thing I can think of, is if this account is your oldest, and it's now not being counted, maybe it's affecting your AAoA and hence the drop.