FICO scores represent the translation of a borrower's overall credit history into a numeric value. FICO scores are calculated by accounting for the number of open credit lines, closed accounts, and positive and negative payment histories. When a consumer disputes an item on a credit report due to inaccuracy or fraud, it will influence his credit score.
Disputes
The act of disputing an item with the credit bureau is not enough in and of itself to cause a ripple in a FICO score. The credit bureau has 30 days to receive confirmation from the reporting creditor whether the debt is valid, and payment histories are accurate. Depending on the findings of this investigation, a FICO score can increase if the item is removed, or remain the same if the item remains unchanged.
Credit Agencies and Creditors
When disputing an item with a credit agency, experts at MyFico recommend that consumers also dispute incorrect information directly with a creditor. Disputing incorrect items with both a credit bureau and the reporting agency may result in quicker answers regarding the validity of the debt as well as the accuracy of payment reporting.
Considerations
The impact of a successful dispute on a FICO score will be relative to the items being disputed. For example, if a consumer is disputing a late payment that is resolved in their favor, her FICO score will increase as a result. If a consumer disputes an account altogether due to it being opened as a result of identity theft, the removal of an account will significantly increase FICO scores as well. The effect on a FICO score is in direct correlation to the disposition of the dispute once a 30-day investigation has been conducted.
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