Does Disputing a Credit Report Hurt Your Credit Score?

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One of the rights afforded to us under the Fair Credit Reporting Act is the ability to challenge information on our credit reports with which we do not agree. I addressed several methods of disputing credit entries in this Mint article.

The credit dispute process is free and normally takes less than a month. There is some confusion, however, about the impact a credit dispute can have on your credit scores. In this post, we’ll cover what happens when you dispute a credit report, how a credit dispute impacts your credit score, what is disputable, and how you can do so.

When Can I Dispute a Credit Report?

When you file a dispute with the credit reporting agencies, they are required by the Fair Credit Reporting Act to show that the item is “in dispute.” They accomplish this by placing the code “XB” on the offensive credit entry.

The XB code is what’s referred to in my world as a “Compliance Condition Code.” When it’s placed in your credit report, it reads as “Consumer disputes, investigation in process” or some derivative of that wording.

Essentially, it means that the credit bureaus received your dispute and are actively investigating the information.

The Impact of “XB”

When the XB code is present on an account, a public record, or a collection, credit scoring systems treat it differently than they would if the account was not actively in dispute.

This is where the confusion comes from. The FICO score will not allow an item that is actively being disputed to harm your score. How does it accomplish this?

FICO will not consider an item with the XB code present for either its Payment History or Debt related measurements. So, if you have a credit card account with late payments and you’re disputing those late payments, the FICO score will choose not to consider those late payments. And, if you have a credit card account with a large balance and you’re disputing the balance, the FICO score will not consider the balance.

So, does disputing a credit report hurt your score? No. The act of disputing items on your credit report does not hurt your score. However, the outcome of the dispute could cause your score to adjust. If the “negative” item is verified to be correct, for example, your score might take a dip. Note: this dip is not because the dispute was proven inaccurate, but because the XB code is taken off. Alternatively, if the disputed item is proven to be inaccurate, this could raise your credit score.

The fact that the FICO score is temporarily ignoring these items can cause your scores to be higher. Having said that, the score improvement is temporary and can’t be used to “game” the system.

What happens if the disputed item is found to be accurate?

If the item has been verified as accurate, then the credit bureaus are no longer investigating it. That means the credit bureaus will remove the “in dispute” label by removing the XB code.

Once the XB code is gone, then the item is fair game in the eyes of FICO because it has been verified and is, arguably, accurate.

This process isn’t news, and lenders also know about it, which is why you can’t just go and dispute everything that’s bad on your credit reports, have your FICO scores shoot through the roof, and then go apply for a loan.

Most lenders, especially mortgage lenders, require that all items DO NOT have the “in dispute” label before they process an application to closing. They realize the score that has been calculated is likely not the consumer’s most accurate score because the model is ignoring certain aspects of the credit report.

And FICO isn’t the only scoring system that has this specialized treatment of items that are currently being investigated. If you check your credit score using the VantageScore model, you may run into a similar situation.

According to Sarah Davies, Vice President of Analytics and Product Management at VantageScore Solutions, “While an account is documented as ‘Account information disputed by consumer under the Fair Credit Reporting Act (XB)’, it is temporarily excluded from consideration by the VantageScore model.”

What if the item is still being disputed?

If you were not successful getting the offensive credit entry removed or changed, then you can still have it shown as being “in dispute” for as long as it remains on your credit reports. But, that is not the same as an item that’s in dispute AND being investigated.

That is to say, lenders will still likely consider the item when evaluating your credit score since the XB code has been removed.

If you still disagree with an item you can have a label added to your credit reports showing as much. But, that’s not going to cause the score to reflect that label for Payment History and Debt measurements.

How to Dispute a Charge on Your Credit Report

If, after reviewing what happens when you dispute a credit report, you decide it could be the right course of action for you, here’s how you can get the ball rolling.

Step One: Obtain a recent copy of your credit report

In order to dispute an item on your credit report, you’ll need to prove to the powers that be that your credit report is inaccurate. To do so, you’ll want to have a copy of your credit report handy. Consumers are entitled to one free credit report each year from each of the three main credit reporting agencies, which you can access through Or if you’re a Mint user, you can easily view your credit score in the Mint app whenever you please!

Once you’ve got your credit report in front of you, pull out that red pen of yours and notate any items on the report that are inaccurate or with which you do not agree.

Step Two: Determine whether you should or shouldn’t dispute

After you’ve reviewed a recent credit report, consider the following reasons to dispute items on credit report to help you decide if it’s worth a shot:

  • There is incorrect personal information on your credit report, such as your name or Social Security Number
  • There is a negative item that is beyond the statute of limitations for reporting
  • The report shows that you carry a debt balance which you have already settled
  • There is duplicate information shown on your credit report
  • You have a duplicate credit report or mixed information for yourself and another person
  • There are fraudulent items on your report, like a new credit card or loan that you did not open or apply for

Step Three: Decide which credit dispute method to use

File a report with the credit bureau: This is the most common method consumers use to dispute credit reports. Each of the credit reporting bureaus—Experian, Equifax, and TransUnion—have dispute forms on their website which you can fill out. 

Here’s where you can find them:

If the error appears across each of the credit bureaus’ reports, you’ll need to file a separate report for each. Each of the credit dispute processes vary slightly, but in general, you’ll need to include the dispute form with an explanation of the error(s) as well as a copy of your report with the same error(s) notated.

Report the error to the furnisher: Another method you can use to dispute a debt on your credit report is to go directly to the source—the lender, bank, credit card company, or collection agency that misreported information. When you dispute the item, the furnisher will then be required to report the dispute to each of the credit bureaus, making your job a little easier.


To wrap up, let’s review a few of the key takeaways we covered.

  • Does disputing a credit report hurt your credit score? No, credit disputes do not hurt your credit score. When an item on your report is being investigated, the credit bureaus will notate this on your credit report using “XB” code which signals to lenders that the item is under review and should not be considered in their evaluation.
  • Depending on the outcome of your dispute, your credit score may be adjusted to reflect the updated information. If a negative item is removed, the dispute could improve your credit score.
  • To dispute an item on your credit report, follow these steps:
    • Get a copy of your credit report
    • Decide whether or not you should dispute the item
    • File a dispute with the furnisher or the three major credit bureaus with a dispute form and a copy of your credit report

For more information of credit disputes, check out this blog to learn how to win a credit dispute.

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