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sonofisis

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Credit Score Drops after dispute resolution??!
Hi Credit Karma Community. So a cc (collections) dispute of mine just came back as verified. I didn't recognize the original creditor originally but I was sent verification. That said, after the dispute resolution however, my score dropped over 20 points across all three credit bureaus!! Nothing else changed besides the collections company updating the info to them. According to credit karma report this was first reported in May to transunion and equifax, updated once in July and then again this month. Can a collections update negatively impact your score? Is that legal and can they do it whenever they want (or just after a dispute)? How long until my score recovers from this? I want my 20 points back as I did nothing different besides pay my current bills on time and issue a dispute. What gives?! I was at 697 about to break 700 and this put me at 669! I am fuming!

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When a negative account is updated, it looks fresh to the scoring system and is calculated as a recent derogatory. That is normal and they can update the account every month if they wish, they are not violating any laws by doing so.

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That's part of the process.  Don't fret; continue to do your paying your bills on time thing. Now that the debt is legit; call the cc and try to negotiate a "pay for delete agreement". This is when you offer to pay the debt off in full only if they will agree to remove the collections off your credit report completely. This is legal, and has about a 50/50 success rate. You just got to be polite, don't take no for an answer in a calm tone. Even ask to speak to a manager. Make sure they send you the agreement in writting before you pay. If they decline, then try a settlement offer. This is where you pay about 25%-50% less than what you owe to satify the debt. It will be reported as payed as agreed; however the fact that an account been in collections will still show up until the fall off date. Your score will still go up; but with the pay for delete no one would have known that you had a previous collections....

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Thanks to both of you! I guess they know how to pressure me into paying. Taking in what both of you are saying, I do think I will negotiate the pay-to-delete or discounted pay out. Great advice!

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