Tips on How to Remove Dispute from Credit Report | Credit Disputes
Looking for tips on how to remove dispute from credit report? During the mortgage process, underwriters may put a loan in suspense when there are credit disputes on a credit report. Loan Originators should not issue a pre-approval or submit a loan before reviewing and taking proper procedures when there are disputes on a borrower’s credit report.
Why Can This Be an Issue?
In some cases, credit reports with disputes are considered inconsistent reports. Having credit disputes and removing them on a credit report can affect the credit scores and change the findings when running the Automated Underwriting System (AUS).
It is important to tell your Loan Originator about disputes on a credit report prior to running credit. This will prevent an extra inquiry on your credit report, which could change your score. Often, disputing credit before applying for a mortgage is necessary if the credit report is inaccurate and reporting on Experian, Equifax, or TransUnion.
FHA and Disputing Credit for Derogatory Credit Accounts
Charge off accounts, disputed collection accounts, and disputed accounts with late payments in the past 24 months are considered disputed derogatory credit accounts.
- If a borrower has more than $1,000 or more collectively in disputed derogatory credit, the loan will be downgraded to a manual underwrite.
Some exclusions include:
- Disputed medical accounts; and
- Accounts that have been disputed resulting in identity theft, credit card theft or unauthorized use.
- Would need a copy of a police report; or
- Other documentation from a creditor to support the status of the account.
Can Affect the Underwriter’s Analysis of Credit
Mortgage companies will analyze the effect of disputed account and the borrower’s ability to repay the mortgage. Often, borrowers will find that an underwriter will suspend the loan and ask for a new credit report. It is important to understand the circumstances of credit disputes and mortgages before starting the mortgage process.
What Is A Rapid Re-score?
A rapid re-score correction is for clients who need to take consumer disputes off of credit reports quickly. This usually takes up to 30 minutes to 2 hours and will take about 2 to 5 business days to reflect on a credit report.
In order for this to happen quickly, a borrower must ask for the removal to be expedited.
- Requests can take up to 30 days if the request is not expedited.
1st Step on How to How to Remove Dispute from Credit Report
- A client will need a credit report directly from Experian and Equifax – currently TransUnion does not need this.
- To get a credit report directly from the bureaus, a borrower should follow the links:
- Need the account numbers and name of accounts that have the dispute status.
If you already have a credit report, re-pulling credit is not advised.
2nd Step: Call the Bureaus
When a borrower gets a representative on the phone, they will need to give the account number that is being disputed. Ask if the dispute has been placed by the bureaus or company and ask to remove the disputes.
- TransUnion Dispute Department: (800) 916-8800
- Experian Dispute Department: (800) 493-1058
- Equifax Dispute Department: (800) 203-7843
Step 3: Follow Up On Credit Disputes
Cases can vary on how long it takes to remove disputes, but after 5 to 7 business days, a borrower can call to ensure that the credit disputes have been removed.
What if My Loan Originator Already Pulled Credit?
For example, Nationwide Mortgage & Realty, LLC uses a national credit reporting agency, Advantage Credit, and they have a 3 step process. This is costly and only recommend if urgent.
- Step 1: the borrower will need to contact the creditor and ask that they remove any disputes on the account.
- Step 2: execute a letter that can be provided by your Loan Originator and the information should look as follows:
Letter to Credit Bureau to Remove Dispute
CONSUMER NAME DATE
CITY, STATE ZIP
To whom it may concern,
I (CONSUMERSNAME) currently do not dispute the following accounts either as reported on my credit report or directly with the creditors. I have contacted the creditors directly and closed any disputes or confirmed that there are no open disputes at this time. I am requesting that Equifax, Trans Union and Experian remove the dispute comments from the following accounts;
- Step 3: send the letter to credit bureau to remove dispute to your Loan Originator so that they can send it in to the national credit reporting agency.
Results will vary based on mortgage company, national credit reporting agency, and borrower’s situation.