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.