Before or during the home financing process, you may find it necessary to dispute items on your credit report. If you have to dispute an item on your credit report, ensure you do it prior to applying for your mortgage. If you have open or unresolved disputes on your credit report, you may not be able to qualify for your loan until these items are resolved. 

If you know you have no active disputes on your report and you are ready to begin your application, log in to Neat's website to begin applying today.

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Credit Disputes and Mortgage Lending 

Having an open credit dispute may impact your loan process if you are making a purchase. Since purchase contracts often include contingencies with specific deadlines for closing and funding, you could become ineligible for the purchase and lose your dream home should a credit dispute hold up your loan. Even if a pre-approval has been issued, a credit dispute could go unnoticed in the initial review and cause issues later in the process. 

Credit disputes are not allowed during the mortgage process. If you are in the middle of a dispute, the lender will receive an inaccurate reading of your credit, especially if this dispute is on a derogatory mark. Disputes have various results, which in some cases could make you ineligible for your loan during the process. If a credit dispute is detected on your loan during the approval process, your loan will be “suspended” until the dispute is resolved. Suspending your loan means it is denied contingent on items that can be resolved. 

What is a Credit Dispute? 

Disputes which will make you ineligible under the FHA are the following:

• charge off accounts
• collection accounts
• derogatory credit accounts with late payments in the last 24 months

There are some exceptions to this rule, and the following credit disputes are allowed during the mortgage process:

• non-Medical Collection Accounts if all creditors outstanding aggregate credit balance totals under $1,000
• medical collections
• collection accounts with zero balances
• disputed accounts with late payments that are aged longer than 24 months
• credit disputes that are in current standings and are being paid as agreed

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How to Resolve a Dispute 

If you need to remove a dispute quickly, there are some steps you can take. First, call the creditor directly and inform them that the account in question is no longer in dispute and request retraction. The most important step is to request the creditor call all three credit bureaus to retract the dispute. To help expedite the process, call all three credit bureaus directly and request to retract all disputes. Ask the credit bureaus when this change will be made (typically it will take 72 hours or longer). Once this change has been completed, your mortgage lender can issue a hard credit pull on your report to verify disputes are removed. Make sure you do not pull your credit before this change is made, as this can result in excessive pulls. To contact all three bureaus, here is their information: 

Experian: 1 866 200 6020

Equifax: 1- 866-349-5191

TransUnion:1-800-916-8800

Why Neat?

Neat employees are unable to issue or resolve credit disputes on your behalf. However we are more than willing to work with you to help you achieve your home financing goals. Neat’s team of home loan advisors can give you expert one-on-one advice for both home purchases and refinances. 

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Thanks for reading! Please note that this content is intended for educational purposes only. As laws and lender requirements change regularly, you should speak to a home loan advisor about your particular situation. If you’re interested in purchasing or refinancing a home,  check out today's mortgage rates or get pre-approved in 3 minutes.