How To Remove Credit Disputes

Removing Accounts In Dispute

Credit Disputes And How To Remove Credit Disputes To Qualify For Mortgage

This guide will explain on How To Remove Credit Disputes On Your Own Fast In Order To Qualify For Mortgage

Many of you are reading this article because you are either trying to get pre-approved for a mortgage or are in the mortgage process and the mortgage underwriter has put your mortgage loan application in suspense due to having credit disputes. Gustan Cho Associates Mortgage Information Center want to provide useful resources and information to our viewers and make sure that every loan borrower goes through their mortgage process as smoothly as possible. Something like a credit dispute may seem very minor and simple and easy to remove but that is often not the case. No loan officer should issue a mortgage loan pre-approval to any borrowers if the borrowers have credit dispute credit rating on their credit report that are non-medical disputes with a total aggregate outstanding unpaid balance of over $1,000 and/or charge off accounts.

Basics Of Credit Disputes And The Mortgage Process

Nothing is wrong with credit repair and credit repair is highly recommended not just for mortgage loan borrowers but to all consumers who have derogatory credit. There are thousands of credit repair companies in this country and countless of books and online courses teaching consumers on how to repair their credit. The most common method with credit repair is by disputing derogatory credit items to the three giant credit bureaus; Experian, Equifax, and TransUnion.  Consumers try to get their derogatory item deleted by writing a letter disputing the validity of the derogatory credit item to either the creditor and/or credit bureaus and/or both. Once the creditor and/or credit bureaus receive the credit dispute letter, they have 30 days to contact the creditor and request the validity of the consumer’s dispute and send proof to the credit bureau. The credit bureau will examine the response of the creditor and will check to see if the credit dispute is valid or not and make a decision of whether to either delete the derogatory credit item off the consumer’s credit report or let the derogatory credit item remain on the consumer’s credit report because the creditor has confirmed that the credit has justified their bad credit reporting. If the creditor does not respond or fails to provide sufficient evidence that the derogatory item is valid, the derogatory credit item will get removed by the credit reporting agency investigating the credit rating dispute.

Again, millions of consumers will go through credit repair in hopes of removing the derogatory credit items off their credit reports and improve their credit scores. Many home buyers who had prior bad credit go through credit repair in hopes of removing their derogatory items off their credit report in hopes of improving their credit scores so they can qualify for a home loan. Unfortunately, credit disputes will back fire on the mortgage borrower because their are specific mortgage guidelines when it comes to credit disputes and the mortgage process.

FHA Guidelines On Credit Disputes And The Mortgage Process

HUD Guidelines on credit disputes are very specific. Here are the general FHA Guidelines On Credit Disputes and The Mortgage Process .

  1. Credit Disputes on medical collection accounts are exempt. Consumers can have credit disputes on all medical collection accounts and the outstanding balances do not matter and still qualify for a FHA Loan.
  2. Consumers can qualify for a FHA Loan with credit disputes on non-medical collection accounts as long as the non-medical collection accounts has a zero balance.
  3. Consumers CANNOT qualify for a FHA Loan if they have any credit disputes on any charge off accounts.
  4. Consumers cannot qualify for a FHA Loan if they have credit disputes on non-medical collection accounts if the total of the outstanding balances is higher than $1,000.

Consequences And Risks Of Removing Credit Disputes

FHA does not require you to pay off outstanding collection accounts to qualify for a FHA Loan. Medical collection accounts and charge off accounts are exempt from debt to income ratio calculations, however, if you have outstanding non-medical collection accounts that have outstanding unpaid balances of $2,000 or greater, then FHA Guidelines On Collection Accounts require that 5% of the outstanding unpaid balance needs to be used as the borrower’s monthly debt even though the borrower does not have to make any payments. Removing the outstanding collection accounts off the borrower’s credit report will solve the lender not counting the debt to income ratios because deleting collection accounts cannot be found out since they are not public records. Many borrowers with larger outstanding collection accounts and higher debt to income ratios try to dispute derogatory credit accounts and it works most of the time. However, there are times where the creditor and/or credit bureaus will give you a very difficult time when you try to retract a credit dispute. Here is a guide on how to remove credit disputes off your credit reports and how you can do it yourself.

How To Remove Credit Disputes Off Your Credit Report: Fast Track

The rapid correction method on how to remove credit disputes can help consumers who need to get the verbiage of “Consumer Disputes This Account” statements that is showing on their credit reports removed from an account rapidly. This can take anywhere from 30 minutes to up to 2 hours to accomplish.

  • What You Need to Get Started:
    • Get your Credit Reports directly from Experian and Equifax (this has been discontinued in 31 states) (TransUnion does not require this). You will need the Report Number on the reports provided by the credit bureaus from Experian.com and www.Equifax.com.
    • Note the names and account numbers of the accounts that have the Dispute status on your credit report.
  • Make the calls: Once you have found this information you will need to call the credit bureaus that is showing the credit disputes. The telephone numbers provided are for the dispute department that you will need to contact to speak with to accomplish this task.

credit dispute

During the conversation you will give the representative of the credit bureau the account number that is being disputed. You will also need to ask if the dispute has been placed by the credit bureaus or the creditor and/or company.

ASK THEM TO REMOVE THE DISPUTE!

  • Original Creditor Dispute: If you find that the account was put into dispute by the creditor, you will need to contact the creditor directly and ask them to remove the account from disputed status and to update the credit bureaus with the information that this account is no longer in dispute.
  • Follow Up: To ensure that the account has been successfully removed from Dispute Status you can call the above listed numbers to find out the status.  The above process of removing the credit disputes usually takes 5 to 7 days to be completed.

CONVENTIONAL METHOD OF REMOVING CREDIT DISPUTES

The second way on how to remove credit disputes is by completing the form that is listed below and faxing it to the credit bureaus and the creditors and requesting that they remove the credit disputes.  Credit repair experts recommends that you send this to both the credit bureaus and the creditors. The fax numbers listed may not be active, we recommend that you still mail a copy to the bureaus via certified mail as well.

This process can take anywhere between 30 to 45 days to complete but works well if the issue needs to be addressed but not is not an urgent matter yet.

Dispute Letter Instructions:

Step 1: Copy and Paste the text below this box into a word processing application such as WORD.

Step 2: Copy and Paste the credit bureau name and address that you are sending this letter to – if you are sending this letter to a creditor then you will need to look up the name and address for the creditor.

credit dispute letter instructions

Step 3: Type out the name and account numbers of the accounts in dispute.

Step 4: Type out your personal information in the appropriate places on the form provided below.

Step 5: Make sure to include a copy your drivers license, social security card, and current utility bill with your dispute.

Step 6: Mail and/or fax your dispute letters to the credit bureaus and/or your creditors in dispute.

Attention: _______________________

Address: _____________________

City, State, ZIP: _______________

The following accounts are being listed on my credit report as being in dispute. I no longer wish to dispute this account and consider it resolved for now. Please remove this statement from the following accounts:

{{{List Account Name and Number}}}

Thank you for your help regarding this issue.

Sincerely,

 

Name: ______________________________________________

Social: _______________________

DOB:   _______________________

Address: _______________________

City State, ZIP: _______________________

The above are the steps on How To Remove Credit Disputes on your own. If you need professional credit repair or consultation, you can visit Credit Fix Advisors for general credit advice on how to prepare your credit and prepare to qualify for a mortgage.

 

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