Can Disputing Your Accounts Damage Your Credit Score?

Can Disputing Your Accounts Damage Your Credit Score?

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A common question Ive heard from consumers seeking credit repair regards sending dispute letters to challenge some of the information on their credit reports is, what sort of impact it will have on their credit scores. Most people know that dispute letters can be successful in wiping out some of their inaccurate credit history, but what happens if they arent successful? Will your credit score actually take a hit as a result?

One thing Ive found that frightens a lot of people about disputing old accounts is the notion of waking the sleeping giant. That is, alerting creditors and/or collectors that you have an account that they may have forgotten about, or have at least stopped contacting you about.

Suddenly, youve alerted them to the fact that you not only owe them money, but are challenging whether or not their claim to your money is accurate or not. With the scent of blood in the water, theyre now likely to come after you with everything theyve got, and that includes driving your credit score into the ground.

The truth however, is actually brighter than you might realize. According to FICO, the firm responsible for actually determining your credit scores used by creditors and lenders, disputing accounts with a collection agency or anything on your public record will not impact your score. Disputing with the original creditor, on the other hand, will. FICOs reasoning for this is that any accounts you have disputed go into investigation for at least 30 days and depending on factors such as the balance, payment history, and credit limit may drop your score by a few points while its under investigation.

Some creditors may even update your payment history to include a late payment or two that they may have forgotten to list, which obviously wont do your overall score any favors. Thats why we generally only recommending disputing credit accounts that you already know are reporting misinformation, rather than disputing every account that looks bad on your report, as doing so could drive your score further down than it may already be.

Generally speaking though, most peoples credit scores take a hit of at least a few points when they dispute any type of recent credit account, especially if its a credit card that ties into your overall utilization. Rather than lament your attempts at credit repair, wait until the dispute is resolved to see what type of impact it actually has on your score. If you dont get the results you want, work with the original creditor to resolve them in the best manner possible.

About the Author:
John LeBlanc has written more articles on credit repair than he'd care to count. For more information on San Diego credit repair services, give My Credit Group a call.



Article Originally Published On: http://www.articlesnatch.com


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