Does Verbiage on My Credit Report "Account Information Disputed by Consumer" Affect My Credit Score?

Jul 13 2020 Published by under Uncategorized

There is a misnomer that exists when a consumer disputes an account on their credit report. The misconception is when the account shows in dispute status, that this does not affect the credit score. In fact, there are dozens and dozens of dispute narratives that are referred to as Persistent Narratives which means that they stay on even after the dispute is over. When these narratives are showing, this does not mean the system is bypassing the dispute so as not to affect the credit score but quite the contrary. When these are showing, the system actually includes these accounts in dispute as part of the overall equation. However, there is one exception.

Consumer Disputes – Reinvestigation in Process

The initial narrative that is placed on a consumers report when an account has been disputed is Consumer Disputes – Reinvestigation in Process. It’s only when this narrative is used that credit scoring systems bypass the account in dispute. However, it is important to note that the two narratives mentioned here are very easy to get confused but there is a big difference between them. Quite simply, one counts against you and the other does not. The initial narrative that is posted when a consumer files a dispute will only stay around until the dispute has been satisfied by the credit bureaus but while it is present, the account will not count against you. Once the bureau is satisfied that they have accomplished a satisfactory investigation, the narrative can be changed to Account Information Disputed by Consumer, at which point the account begins to count against your overall credit score. Another Persistent Narrative you may see is, Consumer Disputes-Says Belongs to Ex-Spouse.

Consumers may likely see a drop in the credit score once the initial narrative Consumer Disputes – Reinvestigation in Process, is removed. For an example, if a charge-off was being bypassed while it was in the initial dispute process however the initial dispute process is now over, the credit score will likely go down due to the fact that the charge-off is now fair game and being counted against you once again, even though you may still be in the process of challenging the account. There are occasions when the credit bureaus will allow a consumer to continue to dispute and account a number of times in succession, and allow for the initial narrative Consumer Disputes – Reinvestigation, to remain on the report. However in my experience from working with consumers on this issue, the bureaus will usually place a Persistent Narrative after the first or second attempt at disputing the account.

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The Components of a Credit Report

Jul 13 2020 Published by under Uncategorized

Although each credit bureau uses slightly different terminology, the information contained in their reports is essentially the same and include these general categories:

  • Personal profile – information about the person, including his or her name, previous name(s), social security number(s), current and former address, current employer, and previous employers.

  • Current credit accounts – the report includes all credit and loan accounts, also known as “trade lines,” opened by the consumer. Information provided includes the type of loan, when it was opened, the current balance, payment history, and the current status, i.e., whether it is still active, paid in full, defaulted, or closed.

  • Credit inquires– when borrowers authorize lenders’ review of their credit report when processing a loan request, referred to in the industry as a “hard inquiry,” it is documented in the credit report and, if there are a high number of inquiries, it can affect the credit score. A “soft inquiry” is one that was not authorized by the consumer, and it does not affect the credit score. Soft inquiries are typically from credit card companies that are marketing pre-approved card offers.

  • Public records & collections – the results of collection efforts by creditors are reported, including collection accounts, bankruptcies, tax liens, foreclosures, wage garnishments, lawsuits, and judgments awarded.

  • Credit Score – the credit scores calculated by credit bureaus are included in the credit reports they offer for sale, but the bureaus are not required to provide that proprietary information in the free annual reports available to consumers under federal law.

There is also specific personal information that the credit report cannot contain, including:

  • Gender

  • Race, ethnicity, or national origin

  • Political affiliation

  • Religious beliefs or preference

  • Checking or savings account information (although specialty bureaus can report accounts that were closed in default with money owed)

  • Hard inquires older than two (2) years

  • Debt accounts subject to seven (7) year limit

  • Bankruptcy filings older than ten (10) years

  • Medical condition or a debt account incurred from a hospital bill

Legally restricted personal information can mistakenly appear in a credit report. A typical scenario is the indirect disclosure of a healthcare debt when the account is sold by the hospital to a collection agency. While the debt account may only be noted as a “medical collection” in the report, the hospital’s name (Dr. Smith’s Cancer Treatment, Williams Diabetes Center, etc.) can lead to an assumption about the consumer’s medical condition.

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