IIn this blog, we will discuss and cover VA credit dispute guidelines during the mortgage process. VA loans is hands down the best mortgage loan program in the U.S. However, not everyone can qualify for VA loans. Only active or retired members of the U.S. Armed Forces with a certificate of eligibility (COE) can only qualify for VA loans.

VA has one of the most lenient mortgage guidelines than any other government or conventional loan programs. VA has the most lenient waiting period after bankruptcy and housing event.

There is a two-year waiting period after bankruptcy or foreclosure, deed in lieu, short sale. VA does not have a minimum credit score requirement nor a maximum debt-to-income ratio cap. Gustan Cho Associates is a mortgage company licensed in multiple states with no overlays on VA loans. When disputing credit issues on a VA loan, the process follows guidelines similar to those used to dispute credit on other types of loans. In the following paragraphs, we will cover the general steps you can take.

Review Credit Reports For Errors and Inaccuracies

Review Your Credit Report by getting a copy of your credit reports(Equifax, Experian, and TransUnion). Get a free copy of your credit report from each bureau at AnnualCreditReport.com once a year.  Identify Errors:

Carefully review each credit report to identify any inaccuracies, errors, or discrepancies. This could include incorrect account information, outdated information, or accounts that belong to someone else.

Collect any supporting documentation proving your credit report’s inaccuracies. This could include statements, receipts, letters, or other relevant documents. Contact the credit bureaus in writing to dispute any inaccuracies you’ve found on your credit reports online, by mail, or by phone. Be sure to provide clear and specific details about the errors and include copies of any supporting documentation.

VA Credit Dispute By Contacting Creditors

If the inaccuracies involve specific accounts, you may also need to contact the creditors directly to dispute the information. Please provide them with the same documentation you provided to the credit bureaus. Follow-up:

Keep records of all communications with the credit bureaus and creditors, including dates, names of representatives, and any reference numbers. Follow up regularly to ensure that your disputes are being investigated and resolved.

Wait for Resolution: The credit bureaus typically have 30 days to investigate your disputes and respond to your request. During this time, they will contact the creditors to verify the information. If the information needs to be more accurate, the credit bureaus will update your credit report accordingly.

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Review Updated Credit Report

Once the investigation is complete, review your updated credit report to ensure the inaccuracies have been corrected. If you’re obtaining a VA loan or if you already have one, it’s important to notify your lender of any credit disputes and provide copies of the updated credit reports once the inaccuracies have been corrected. After resolving the disputes, monitor your credit regularly to ensure that the inaccuracies don’t reappear and maintain good credit health. It’s important to note that while disputing inaccuracies on your credit report can help improve your credit score and financial standing, it may not guarantee approval for a VA loan or any other type of loan. Lenders will consider various factors in addition to your credit history when evaluating your loan application.

VA Credit Dispute During Mortgage Process

Per VA Credit Dispute Mortgage Guidelines, credit disputes are not allowed during the mortgage process. Any non-medical VA credit dispute needs to be removed in order for the mortgage process to proceed. Medical collections are exempt from VA Credit Dispute Retraction Guidelines. Per VA Credit Dispute Lending Guidelines, there cannot be any non-medical credit disputes.

If there is, the account goes into suspense until credit disputes are removed. Zero balance non-medical collection accounts are exempt. So are medical collections.

Any non-medical collection accounts with a total aggregate outstanding balance of under $1,000 are exempt from removing the disputes. Loan officers should not issue pre-approval letters to any borrower with outstanding credit disputes unless the credit disputes are exempt from retraction.

Reasoning Why VA Credit Dispute Are Not Allowed By Lenders

The reason, why VA requires borrowers to remove credit disputes, is because credit scores with credit disputes are inaccurate. Whenever someone disputes a derogatory tradeline, the credit reporting agencies automatically discount the negative item from the credit scoring formula. This is why credit scores automatically increase when consumers dispute a negative credit tradeline. When consumers remove credit disputes, the scores go back down. A loan office should never issue a pre-approval letter with outstanding disputes. The automated underwriting system findings may be inaccurate with outstanding credit disputes.

Exempt From VA Credit Dispute

Charge off accounts, outstanding collections, late payments, judgments, tax liens, are not allowed to have credit disputes. The following credit disputes do not have to be removed. Outstanding collections that total less than $1,000 or less do not be retracted. Medical collections. Accounts associated with identity theft as long as the borrower can provide a police report or documentation by the creditor pertaining to being a victim of identity theft. The borrower’s ability to repay the mortgage is a major factor analyzed by mortgage underwriters. This is why an accurate credit score is important along with the borrower’s overall past payment history.

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How To Remove Credit Dispute

Borrowers can try to remove credit disputes directly by clicking this link: HOW TO REMOVE CREDIT DISPUTES. We will go over the general steps in removing credit disputes. Get access to a consumer credit report through annualcreditreport.com or another service provider. The first step is to request a consumer credit report by the following credit bureaus:

• www.experian.com
• www.equifax.com
• Go over the accuracy of credit tradelines
• Retract the disputed credit tradelines by notifying the credit bureaus

Phone Numbers To Retract VA Credit Dispute

Here are the phone numbers to the three major credit bureaus:

• TransUnion Dispute Department: (800) 916-8800
• Experian Dispute Department: (800) 493-1058
• Equifax Dispute Department: (800) 203-7843

The borrower needs to contact the creditor they are disputing and request retraction of disputes. Or if they do not cooperate, need to write a letter to the credit bureaus to retract the credit disputes

PLEASE READ THIS ARTICLE ON HOW TO RETRACT CREDIT DISPUTES AND SECRET PHONE NUMBERS TO GET THROUGH TO THE CREDIT BUREAUS

How To Write A Letter To All Credit Disputes When You Need To Retract Credit Disputes 

Please contact Gustan Cho Associates for more information on retracting credit disputes during the mortgage process and qualifying for a mortgage. Borrowers who need to qualify for a mortgage with a mortgage company licensed in multiple states with no lender overlays on government and conventional loans, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. Gustan Cho Associates has a national reputation of being a one-stop mortgage lending shop. Gustan Cho Associates does not just have no lender overlays on government and conventional loans, but we have lending partnerships with over two dozen non-QM wholesale mortgage lenders. If there is a mortgage loan program available in today’s market, you can rest assured Gustan Cho Associates has it available. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays. 

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