In the credit world, everyone has a number. Certainly, most know this number is called a credit score. Good or bad, it determines the outcome for many areas such as insurance rates, employment, and of course, buying a home. Since high credit scores are so important in today’s world, many turn to credit repair as a way to improve credit scores. This is accomplished through the credit report dispute process. Borrowers have two choices in this area:
- Dispute credit on your own
- Hire a credit repair company
When it comes to mortgages, lending agencies have issues with credit disputes. Home buyers need to understand how lenders treat a credit report dispute. Additionally, we explain how to remove credit disputes.
How to Make a Credit Report Dispute
As mentioned above, some may dispute items on their own or hire a credit repair company.
Do It Yourself Credit Repair
Credit disputes are free for everyone. First, everyone has access to one free credit report per year through www.AnnualCreditReport.com. It is a report from all three credit bureaus. Plus, anyone may dispute any erroneous items reporting through the bureaus. Other than time, it is free.
Hiring a Credit Repair Company
Credit repair is a multi-billion dollar industry. Wait, we just said disputing is free? Although, the credit report dispute process is free, many turn to credit repair companies. Right many choose credit repair companies to save time. Disputing credit errors may take some time (especially if there are several errors). Although, spending potentially hundreds of dollars to remove erroneous information is a big decision when it is free.
Many turn to credit repair companies out of frustration. Often, disputing items on credit can get right aggravating. You know it is wrong, but getting it changed is another story. Another factor is speed. A good credit repair company may use its staff to remove items quicker than the average person. Finally, many do not know what to do or believe hiring a credit repair specialist is the only option. No matter the reason, credit repair is a booming industry.
Credit Report Dispute Best Practices
When it comes to disputing credit, there are some things to remember:
- Do not dispute everything unless needed.
- Try it free www.annualcreditreport.com.
- If hiring a credit repair company, hire a reputable company.
- Remove dispute language when complete.
Do not dispute every single derogatory item to see what will come off. Remember, credit disputes are for legitimately removing actual credit report errors. This is a common practice among credit repair companies. Just dispute everything!
Credit Report Disputes vs. Mortgage Approvals
Understanding how credit disputes affect mortgage loan approvals is key. A little-known dispute after-effect is that lending agencies have limits on the number of disputes.
Two Reasons Mortgages Do Not Like Disputes
- Disputed trade lines do not factor into the credit score.
- Disputes cause potential issues with mortgage automated underwriting systems.
Therefore, lingering credit report dispute language may cause loan approval issues.
How Credit Scores Exclude a Credit Report Dispute
A credit dispute places disputing language underneath a borrower’s credit trade line. In this case, the item is not factored into the credit score. At first glance, that could be a good thing, but lenders want to see the real credit score which factors the collection. A borrower may have a 700 credit score, but once the disputed language is removed and the collection still exists, the score could drop. It may be a drastic drop. That is why lenders pay attention to a credit report dispute. Many times, lenders require removal of credit dispute language and a credit re-pull.
How a Credit Report Dispute Affects Automated Underwriting Approvals
Depending on the loan type, dispute language may have a negative effect on automated loan approvals. The reason is that disputed trade lines may factor into the loan decision. Obviously, if there is a recent collection or major derogatory item, lending agencies want to make sure there is a real approval. They will factor all credit items into the approval.
In cases where there are too many current disputes, one may be required to request dispute language removal through the credit bureaus. Then, they will pull a new credit report so they can run a newly automated approval. Often, there is an option of a manual underwriting approval too.
How to Remove a Credit Report Dispute Free
Each of the credit bureaus, allow free and quick dispute removal. If the dispute process is over and you are applying for a mortgage, here’s how to do it.
How to Remove Equifax Disputes
Call 404-885-8300. A live person answers it. Request to remove disputes from your credit report. Typically, the removal takes 72 hours or less.
How to Remove Experian Disputes
Call 800-493-1058. Also answered by a live person. Let them know you want to remove disputes from your credit report — also, a 72 hour or less completion time.
How to Remove Transunion Disputes
Call 312-985-2000. Eventually, you can get a live person. Like the others, request dispute language removal. Disputes are typically removed in a few days.