How To Remove Credit Disputes

Removing Accounts In Dispute

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 loan application in suspense due to having credit disputes.

  • Gustan Cho Associates want to provide useful resources and information to our viewers
  • Our goal at GCA Mortgage Group is to make sure that every mortgage 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 with credit dispute on their credit report
  • Non-medical disputes with a total aggregate outstanding unpaid collection account balance of over $1,000 and/or charge off accounts need to be removed prior to the mortgage process
  • Mortgage processors cannot submit files with outstanding credit disputes to underwriting
  • The mortgage underwriter will suspend the file and kick it back to processing
  • Not checking for credit disputes by both the loan officer and/or mortgage processor is one of the biggest reasons there are delays in the mortgage process and can delay the closing
  • Medical disputes, non-medical disputes that are older than two years old, non-medical disputes with zero balances are all exempt from retraction
  • If the total aggregate outstanding unpaid collection account balance is under $1,000, they are exempt from retraction and do not have to be retracted

Gustan Cho Associates has written this step by step guide on How To Remove Credit Disputes.

Credit Repair Companies Can Do More Damage Than Good For Mortgage Borrowers

Why repair firms can do more harm than good to mortgage borrowers

Credit repair is not required nor recommended for homebuyers with bad credit.

  • Do not spend hundreds or thousands of dollars on credit repair if you are planning on doing so just for the sake of qualifying for a mortgage
  • You can qualify for a mortgage with outstanding late payments and charged-off accounts without having to pay them off at Gustan Cho Associates Mortgage Group
  • Credit repair can often do more damage for mortgage loan applicants than good
  • Whatever a credit repair agency can you, you can do it yourself at no cost with the proper guidance of Gustan Cho Associates

Remember that you can qualify for a home mortgage with bad credit, outstanding collections and charged-off accounts, repossessions, late payments, and other prior derogatory credit, BUT lenders want to see rebuilt and reestablished credit with timely payments in the past 12 months.

Basics On How To Remove Credit Disputes And The Mortgage Process

There are thousands of credit repair companies in this country. There are also 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
  • They will check to see if the credit dispute is valid or not
  • Then 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

The above steps is how the credit dispute process works. However, there are many instances where the credit bureaus will still leave the verbiage the consumer is disputing on the credit report. This often causes major problems for borrowers applying for a mortgage.

Reasons Consumers Dispute Derogatory Credit Tradelines

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 borrowers
  • This is because their are specific mortgage guidelines when it comes to credit disputes and the mortgage process
  • You cannot have credit disputes during the mortgage process unless the retraction are exempt
  • Medical collections, non-medical collections that are older than two-years since the date of last activity, non-medical collections with zero balances are exempt from retraction
  • If your total aggregate balance of your collections is less than $1,000, they are exempt from retraction

Do not dispute any derogatory credit tradelines unless you have solid facts on paper prior and/or during the mortgage process.

HUD Guidelines On Credit Disputes And The Mortgage Process

What is the Reasons Consumers Dispute Derogatory Credit Tradelines

HUD Guidelines on credit disputes are very specific.

Here are the general FHA Guidelines On Credit Disputes and The Mortgage Process .

  • Credit Disputes on medical collection accounts are exempt
  • Consumers can have credit disputes on all medical collection accounts
  • Outstanding balances do not matter and still qualify for a FHA Loan
  • 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
  • Consumers CANNOT qualify for a FHA Loan if they have any credit disputes on any charge off accounts
  • 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

If the total aggregate balance of the outstanding collection accounts are under $1,000, then the credit disputes do not have to be retracted.

Consequences And Risks On How To Remove 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 a hypothetical monthly debt
  • This holds true 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
  • This is 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 by settling with the creditor via pay for delete
  • 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

We will explain in this step by step guide on how to remove credit disputes off your credit reports and how you can do it yourself.

How To Remove Credit Disputes Off Credit Report: Fast Track

This 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 quickly 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 and
  • 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.

WARNING: Reaching a human at each of the credit bureaus will be next to impossible. Gustan Cho Associates has a step by step guide on how to reach a human credit bureau representative. Please take a few minutes to read this popular step by step guide on reaching a human representative. Click This Link HOW TO REACH A HUMAN AT THE CREDIT BUREAUS


How to remove a credit 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
  • 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

Sign up to Credit Karma. There is no fee for this. You can check your credit scores and credit report on Credit Karma at no cost. Credit Karma will also send you an email alert if there are any changes to your credit report.

Conventional Method On How To Remove 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.



Name: ______________________________________________

Social: _______________________

DOB:   _______________________

Address: _______________________

City State, ZIP: _______________________

The above are the steps on How To Remove Credit Disputes on your own. If you are in the middle of the mortgage process, your loan officer can help you with retracting your credit disputes.

How To Remove A Credit Dispute From Your Account

Download Tips About Removing Credit Disputes From Your Account

  1. Janice Curt says

    My sincere appreciation goes to Alex Carlucci and Massimo Ressa, through their relentless efforts my credit score is now 790 from 542, He removed the hard inquiries and collections on my credit, Cleared the eviction and judgments on my report including auto loans and student loans are gone without a trace, just like they were never there. I highly recommend him for all jobs on credit repair. Get in touch with Alex Carlucci of GCA Mortgage Group. The team at Gustan Cho Associates have been stellar and the best group of professionals I have ever worked with. I like to thank Dale Elenteny and Maria Windham of Gustan Cho Associates as well.

  2. In this section we will discuss what is required for a Loan Broker Agreement, but before we start, what exactly is a Loan Broker Agreement? To prevent fraud, states require mortgage brokers to enter into mortgage loan origination agreements, more typically referred to as mortgage broker agreements, before
    accepting fees. Legally, any individual who uses a mortgage broker instead of a direct lender to purchase a residence must enter into a fully executed mortgage
    broker agreement before the broker can assess any origination fees. State laws forbid a prospective homebuyer from paying mortgage brokers an origination fee unless a written mortgage broker agreement exists between the two parties. The broker agreement must be signed and dated by the homebuyer and the mortgage broker or the branch manager if the broker works for a mortgage brokerage firm. The written broker agreement must clearly specify the services the mortgage broker provides, the terms of the loan origination fee and the dollar amount that the mortgage broker is to receive as a loan origination fee. In most states, a mortgage broker can only charge an application fee and third-party fees –appraisals, surveys, credit report — before approval of a residential loan by a qualified lender. If the mortgage broker will receive a commission or incentive
    from the lender in addition to the origination fee, the mortgage broker agreement must clearly identify that compensation, the amount and its purpose. Each person licensed as a loan broker or required to be licensed as a loan broker is required to keep and maintain the following records or their electronic equivalent:
    (1) A file for each borrower or proposed borrower that contains the following:
    • The name and address of the borrower or any prospective borrower.
    • A copy of the signed loan broker agreement.
    • A copy of any other papers or instruments used in connection with the loan broker agreement and signed by the borrower or any prospective borrower.
    • If a loan was obtained for the borrower, the name and address of the creditor.
    • If a loan is accepted by the borrower, a copy of the loan agreement.
    • The amount of the loan broker’s fee that the borrower has paid. If there is an unpaid balance, the status of any collection efforts.
    (2) All receipts from or for the account of borrowers or any proposed borrowers and all disbursements to or for the account of borrowers or any proposed borrowers,
    recorded so that the transactions are readily identifiable. So how do we deal with borrower’s funds that are in our possession?
    Under IC 23-2.5-8-10, Whenever a person licensed under this chapter has possession of funds belonging to others, including money received by or on
    behalf of a prospective borrower, the person licensed under this chapter has a duty to the borrower that includes:
    • upon request of the prospective borrower, account for any funds handled for
    the prospective borrower;
    • follow any reasonable and lawful instructions from the prospective borrower concerning the prospective borrower’s funds; and
    • return any unspent funds of the prospective borrower to the prospective borrower in a timely manner. Any funds provided by a borrower are not for the general use of the MLO, or the organization. Therefore, they should be placed in a separate trust account to pay for third party fees. This would be the same scenario for a lender who is servicing
    a borrower’s loan as escrow funds must be separated from general funds. Each licensed or required to be licensed loan broker must also keep:
    (3) A general ledger that must be posted at least monthly, and a trial balance sheet and profit and loss statement prepared within thirty (30) days of the
    Commissioner’s request for the information.
    (4) A sample of all advertisements, pamphlets, circulars, letters, articles Internet publications, or communications published in a newspaper, magazine, or periodical, or by any other means of distribution. Additionally, scripts of any recording, radio, or video announcement, any sales kits or literature, as well as any Internet communication distributed to at least ten people used in the solicitation of borrowers must also be kept.
    (5) A report that lists all residential mortgage loans, including pending loans and loans that were not closed, originated by the loan broker. The report must be searchable by, or organized according to, the borrower’s, or prospective borrower’s last name and must include the following information for each residential mortgage loan listed:
    • The name and address of the borrower or prospective borrower.
    • The name of the creditor.
    • The name of the mortgage loan originator.
    • The loan amount.
    • The status of the loan, including the date of closing or denial by the creditor.
    • The interest rate for the loan. The report may be prepared or produced by or through the loan broker’s loan origination software or other software used by the loan broker.
    These records must be kept for a period of 2 years in the office of the loan broker in which the loan was originated and must be separate or readily identifiable from the
    records of any other business that is conducted in the office of the loan broker. The information in this course should not be construed as legal advice, but for informational purposes only. Furthermore, if the office in which the records are maintained are outside of Indiana, the records must be made available to the securities division at a location that is located in Indiana, and accessible to the division, or they may must be maintained electronically and made available to the securities division, no later than 10 business days after a request by the securities division to inspect or examine the records.

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  4. Tammy Osario says

    If you have an account that is in dispute (with an “account disputed” comment) but has a positive history, free of any late payments or a charge-off, then disputing negative credit tradelines will increase your scores. Removing the dispute comment will definitely drop your credit scores. I am in Indianapolis, Indiana and I want to get out of land contract and have a better interest than the one I have.

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