Is There a Dispute Note on Your Credit Report?

If you sent a letter of dispute to Experian, Equifax, or TransUnion stating that something was not 100 percent correct about an account, then there might be a notation that says account in dispute or disputed by consumer.

If you hired a professional credit repair service that disputed on your behalf, then the same thing applies.

There’s a Good Reason for the Dispute Notice — and It Helps You

If a negative account (late payments, collection, anything bad) is on your credit report, it lowers your score. If the negative account is false, it would penalize you unfairly. Therefore, the credit bureaus remove the disputed account from the mathematical scoring system. Interesting, as this opens a door of opportunity!

This was a strategy credit repair services used in the past. They would send a dispute, your score would increase, and then you could quickly apply for a mortgage while your score was up. But wait!

The mortgage lenders caught on to that scheme and put a stop to it. They didn’t want risking hundreds of thousands of dollars on a borrower who wasn’t honestly credit worthy. So they made a new rule: No loan approval until all disputes are removed. 

Removing a Dispute Notice

When the dispute has been resolved, the notice will automatically be removed. No worries.

But, if you need to get a mortgage approval before the resolution, then you will need to send a request to the credit bureaus asking for the dispute notice to be removed. OR, in some lucky cases with mortgage brokers, the lender may only require that you write a letter for your loan file that states the account is no longer in dispute (such as when there is a zero balance).

Fix Your Credit First, Apply For a Home Loan After

If you’d like to buy a home, your first step is to review your credit situation and make sure it qualifies. Do not race out to visit open houses and engage a professional real estate agent when your credit is badly in need of repair, because that is a waste of time and emotional energy for everyone — especially you!

Horror Story!

Don’t be like the mom with four children who signed a purchase contract before she applied for a home loan. Here she was in contract, and her credit didn’t even qualify! Her thinking was, if I show a lender my contract, they’ll know I’m serious and approve me. 

Sorry, but it doesn’t work like that. Having a signed purchase contract in no way influences the lender for approval. The story got even worse…

…not only had she signed a purchase contract, but she had given notice to her landlord and couldn’t stay in the apartment longer. She and her children were about to become homeless… if her father had not generously opened his house to the family.

What You Need to Know About the Law

You have the Fair Credit Reporting Act and the Fair and Accurate Credit Transaction Act to protect you from false and untrue items on your credit report.

Your credit report is supposed to be 100% accurate, not 99% accurate. If there is any negative item, such as a late payment notation, an incorrect account number, an incorrect date, or an account that does not belong to you showing on your report, you have the right to have that corrected or removed.

Good to Know!

The dispute notice is a result of the process. As long as you don’t intend on applying for a home loan during the dispute process, there is no negative consequence whatsoever to having the note temporarily on your report. As soon as the inaccuracy is taken care of, the dispute notice will disappear.

This week, I received several emails from readers telling me about their success, thanks to following Repair Your Credit Like the Pros. One reader had their score increase by 70 points when inaccurate negative items were removed. If you need credit repair and don’t have the funds to hire a professional, pick up the DIY book from Amazon that has helped so many other people.

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