Loan officers miss this a lot and so do consumers.
Many believe – and try to use the tactic of – “Hey, let’s dispute this account online. Put it in dispute to take it out of the credit score.”
There’s an assumption that when you write a letter or dispute something online, which creates a 30-day investigation (called a reinvestigation under the Fair Credit Reporting Act), that you are putting the account “in dispute” and removing its effect on the credit score.
But reinvestigation and “in dispute” are two different things.
Disputing an account means that in 30 days an investigation will be completed, in 30 days or less. At the end of that investigation, the account can look exactly like it looked before or have other changes, whatever the investigation produced. It’s wrong to assume that because it was disputed, that the account will be “in dispute.”
This goes back to the Metro 2 code and there are very different types of disputing account information: disputed by consumer, dispute resolution pending, dispute after resolution. One of those may or may not be on the account when it’s over.
And, that brings us to our main point: Not every disputed account is out of the score.