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Question By
pencilmilk

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Score dropped 20+ points after disputing close date of old charge-off account
I have been working on my credit for a little over year now, acquiring 3 credit cards, keeping my utilization low (at or around 10%) and making all payments on time. I also became current on my student loans. As a result of these measures, my score has increased by roughly 70 points, landing me around 660 on Credit Karma for both TransUnion and Experian.

I recently decided to see what I could do to improve the old, negative accounts I have on my report that still aren't quite 7 years old. I have two charge-offs from 2011 that were not sold to collection agencies and have not reported since 2012. Specifically, I started by filing a dispute for a Chase charge-off with a close date of March 2012. I felt that the close date was inaccurate so I decided to file a dispute, hoping that the date would be changed to reflect accurately (as well as indicating that the old, bad debt was even older than it had previously shown on my report) or if Chase was unable to locate my former account, that it would simply be removed from my report. Chase responded to TU and the dispute came back. TU updated to show an earlier close date for the account as I had suspected as well as updating the Date Last Reported on the account to July 2015 (presumably because Chase actually responded). However, I was shocked to see that my score had dropped by more than 20 points. No other changes have recently occurred on my report (no new accounts, past due payments, etc.). TransUnion customer support (and management, as I spoke with a supervisor) claims that the Date Last Reported should not affect the credit score at all, especially negatively. Is this true? Did I make a mistake trying to confirm the accuracy of an old account, only to have it look like newer, bad debt since the Date Last Reported was updated to July 2015?

Thanks in advance for any response. Just trying to navigate my way through credit repair the best I can and hate to take such a big loss in points after fighting so hard for improvement.

-Taylor

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The Transunion rep/supervisor is wrong. Whenever an old negative that hasn't updated in a long time updates it will cause harm to your scores as it looks like a recent or fresh negative. As long as the account does not update again, then your scores will gradually come back up. You should not dispute "closed dates" as they have nothing to do with the length of time the account will remain on your reports. The 7 year credit reporting time rule for negative accounts begins with the "date of first delinquency" (dofd). The date of first delinquency is the date that you missed the first payment that led to the charge off. Make sure you keep an eye on your Fico scores in addition to the ones you get here.

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Reply by
pencilmilk

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Thanks for your reply! I just filed an overall accuracy dispute to roll the dice on the chance that it would be removed or updated accordingly. You are definitely right about the updated Date Last Reported influencing my score negatively. I received a copy of my TransUnion report shortly after posting this and the Chase account now reflects "Charge Off" on each month between the last time they reported in 2012 and July 2015 since the Date of Activity was updated as a result of the dispute. I've learned my lesson and will definitely leave the other old accounts alone until they fall off. I receive my FICO each month via Discover but unfortunately that statement went out before the dispute was complete so I'll have to wait until the next billing cycle to see how this has effected my FICO. Thanks again!

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You're welcome. One other thing, if the accounts have not been sold to debt collectors, are they still showing a balance? If they are showing a balance, it may be affecting your utilization in a negative way. If they are showing a balance and you have the means to pay the accounts, you may want to do so as you will see a small improvement for reducing utilization and you would be preventing them from going to collections and having collections pop up on your report in addition to the charge offs. Keep in mind though, that if this is the case and you go this route, you would get another ding for the other account updating, but since the account at hand has just updated, there would be no harm there, all in all though the reduction in your utilization would likely overcome the update ding and give you an improvement. If the balance on both of the charged off cards is $0, then disregard all that I've said here.

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Also remember that accounts that have passed the Statute of Limitations to be sued in your state for the debt, may be able to be settled for less than the full amount. It is always worth trying a "pay for delete" offer as well, but with most credit card companies they usually will not do that.

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Reply by
pencilmilk

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The two accounts are both charge-offs from Chase. They do still show a balance but were never sold to collections. I had one other derogatory account (a collection) that I paid for deletion on last year and it did not improve my score at all. Both of the charge-offs are past the statute of limitations and apart from the update to the Date of Last Activity on one of them, I doubt they are actively affecting my score very much any longer so I may just sit tight and wait for them to expire. They are not counting towards my utlization from what I can tell. My utlilization generally reports between 6-10% each month.

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discover card

The "FICO" score from Discover is not your real score. Only way to get real score is from. www.myfico.com

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Reply by
pencilmilk

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My understanding was that Discover provides your TransUnion FICO score, specifically? The fine print utilizes the trademark: "Your FICO® Credit Score is based on data from TransUnion and may be different from other credit scores. ...Discover and other lenders may use different inputs like a FICO® Credit Score, other credit scores, and more information in credit decisions. This benefit may change or end in the future. FICO is a registered trademark of the Fair Isaac Corporation in the United States and other countries." What source indicates to you that it is not a legitimate FICO score?

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