At least while the investigation is occuring. I just (accidentally, didn't mean to submit)disputed this account through Equifax 2 days ago and as of today myFICO is showing it disputed and my score DROPPED 6 points. How on earth could this account have been holding up my score by 6 points, unless FICO just punishes people for disputing? It's a Dell account. $1500 limit. Opened 9/2005. This is what True Credit has in account details: More about DFS/CIT Close window Remarks: [TransUnion] Charged off as bad debt Profit and loss write-off [Experian] Unpaid balance reported as a loss by the credit grantor. [Equifax] Consumer disputes - reinvestigation in progress Amount in H/C column is credit limit _____________TransUnion Experian Equifax Past Due:________$0 High Balance: $2119 Terms: Limit:_________$1500 $1500 $1500 Payment:________________________$0 Opened:___09/02/2005 09/2005 09/2005 Reported:__04/30/2007 04/30/2007 04/2007 Responsibility: Individual Individual Individual Late Payments (last 7 years): ______________TransUnion Experian Equifax 30 days late:_______________0______0 60 days late:_______________1______0 90 days late:_______________3______5 And the payment history looks like this: ____________TU_______EX_________EQ 10/05________________OK 11/05________________OK 12/05________________OK 1/06_________________OK 2/06_________________OK 3/06_________________60 4/06_________________90 5/06________________120_________120 6/06________________150_________120 7/06_________________CO 8/06_________________CO__________CO 9/06 10/06 11/06 12/06 1/07_________________CO__________CO 2/07 3/07_________________CO__________CO 4/07_________________CO Now you tell me, if the FICO algorithm removes disputed accounts from the calculation, how can my score have possibly dropped with this account not counted? This account has a CO < 1 year old, has a balance that's 41%+ over the limit (killing utilization), and has 5 90 day lates according to EQ. Yet it was adding 6 points to my FICO score?
First, if I had the full correct answer, I'd be rich selling my own scoring model! But...this does not make full sense. I'm trying to find a Q&A from MyFico where they detailed the effect on an account in dispute on your score. Personally, I don't think the FICO scoring model "likes" disputes. Models such as these have a hard time dealing with exceptions. My guess is that the model somehow does not "take it out" completely. Looking at the CDIA manual I posted, it is completely possible the "dispute" was mis-keyed at entry. (Yes the account is in dispute, but the "code" may not be correct). My guess is that the original FICO model did not think about scoring while accounts were in dispute. I think this was a "patch" to the algorithm, and doesn't work completely. Now supposedly a dispute "takes" the account out of the formula. But, there seems to be an issue with the calculations. Hence, FICO's disclaimer to not apply for credit while accounts are in dispute (and possible effect on score). As a note, there have been stories of people "artificially inflating score and lowering utilization by disputing and immediately applying for the "instant credit" offers.SO, it seems that scoring a report with an account in dispute can go either way. But to your score, the only thing I can see is that it possibly threw you into a new "Scorecard category", where your score is "relative" to similar credit reports. The other aspect of this "bucket or category" scoring model is that YOUR score can change due to changes in the bucket, though there is no change in your report. I know tis doesn't sound right, but it is how the model works. Let us know how your score reacts when the dispute investigation is completed. I am very curious about these movements, and I always try to gain a bit more insight into its algorithm.
