Disputing bad credit items to delete off your credit report

Disputing Credit Derogatories

Disputing Bad Credit Items

Having good credit is a necessity these days. Disputing bad credit should be done by every consumer. Low credit scores will cost you higher interest rates and interest expense.  A lower credit score can cost you over $100,000 plus over the life of a mortgage loan.  A lower credit score can also cost you thousands on an automobile loan, credit cards, insurance premiums, and may even cost you a job.  Many employers utilize credit checks as part of their hiring process.  A bad credit score may be taken by an employer that an individual is not financially responsible and may deny the applicant a job.  All mortgage loan originators must pass both a criminal background investigation and a credit check prior to being granted a mortgage loan originator’s license.  A poor credit score can be grounds for the state not granting the mortgage loan originator a license.  Every year, mortgage loan originators have to submit to a credit check in order to renew their licenses as well.

Check your credit report

Everyone should check their credit report at least once a year by disputing bad credit on their credit report.  It does not cost anything disputing bad credit to the credit bureaus.  By law, everyone is entitled to a free credit report from each of the three main credit reporting agency; Transunion, Experian, and Equifax.  If you have bad credit on your credit report and you have never disputed bad credit, I strongly recommend diputing  bad credit.  It is not difficult to repair your credit and whatever a credit repair company does, you can do it yourself.  Make sure that you document and make copies of every dispute letter as well as copies of credit reports and keep diligent notes.  If you contact the credit bureau and talk to someone, make sure you document the time, date, name of the person you talked to and what was discussed.  Make sure that whenever you send a dispute to any credit reporting agency that you send it via certified mail and request a return receipt.  Being organized is key in taking on the task of repairing your credit.

Federal Law with regards to Disputing Bad Credit Items

One of the most important reason why documentation is so important is because under the FCRA, Fair Credit Reporting Act, credit reporting agencies have 30 days, by Federal Law, to respond back to your dispute with the outcome of your request to verify your negative information.  If their credit investigation of your credit dispute lingers on longer than 30 days, the credit reporting agency must delete the disputed item.  With proper documentation like certified mail return receipt being requested, you have proper documentation for the credit reporting agency to remove the negative item if they did not get back to your with a response within the 30 day deadline.

Disputing Bad Credit Items Online or by Mail

You will have the option of disputing your derogatory credit items online or via mail.  I strongly recommend that you always dispute via certified mail because of documentation purposes.

If you have many derogatory items on your credit report, you should dispute all the negative item all at once on a letter format, listing the negative line items and account numbers and state that those items are not yours.  The credit reporting agency will then contact the creditor who is reporting or reported you for verification.  If the creditor fails to respond or verify that the debt is yours, the credit reporting agencies must delete the negative item.  Most folks with multiple derogatory negative credit items can have over 20% of their derogatory credit items deleted after the first dispute.  You will need to repeat this process of disputing several times before you can remove most of the negative credit derogatory items from your credit report.  Each time you dispute, you will need to use a different reason for them to investigate and I will cover the follow up dispute letters with you on later blogs.

I am a licensed mortgage banker and correspondent mortgage lender and specialize in helping borrowers with bad credit get home loans with bad credit and mortgage loans with no lender overlays and the pricing for mortgage rates depends on the borrower’s credit scores. 

Credit Scores and Mortgage Rates

A mortgage loan borrower with credit scores above 700 will get better mortgage rates than a borrower with a credit score in the 600s.  You can definitely get bankruptcies, foreclosures, judgments, tax liens, collections and judgments deleted from your credit report but you cannot lie on your mortgage application that you do not have bankruptcies, judgments, and/or collections.  But getting those derogatory items removed from your credit report will definitely give you a higher credit score which will save you in interest expense.  Plus, credit reporting companies are known to have questionable and incorrect credit information on consumer’s credit report.

If you have any questions, please do not hesitate to contact me at www.gustancho.com .

Gustan Cho NMLS ID 873293

Condo Hotel Mortgage Lender and Bad Credit Mortgage Lender specializing in Home Loan with Bad Credit and no lender overlays


The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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