All consumers have the ability to dispute incorrect items on their credit report. However, home buyers should be conscious of the impact that it can have on obtaining home financing. This blog offers important details on disputed trade accounts and the affect on MA mortgages.
Preparing for a Real Estate Purchase
If you are thinking of buying real estate in the future, be diligent about reviewing your credit score far in advance. This affords you the time to find and address mistakes prior to applying for a loan. Ideally, you would want any disputes cleared before beginning the home buying process. If you do have any pending items, inform your loan officer early in the process. Do not presume that it was noticed on your report at the pre-approval stage.
What Are Disputed Trade Accounts
If you find an error on your credit report, you have the ability to dispute it by sending information to the credit bureaus. A note is made in your credit report and the accounts are called disputed trade accounts. Credit bureaus can choose to ignore the particular items when compiling your score, so they might not impact your score during that time. Typically, the notation is removed when the mistake is resolved and, if necessary, the proper corrections are completed. This process may take a few months. Although you may not see a reduction of your score, the details of the dispute may result in other problems.
Disputed Trade Accounts And The Affect On MA Mortgages
Many lenders utilize electronic underwriting systems. Your credit score and other aspects of your credit report are reviewed by this system. Disputed trade accounts may cause a mortgage loan to be denied or diverted to manual underwriting. Gather all documents and information related to the disputed trade accounts. If it was a debt that you paid off but was not properly reflected in the credit reports, have statements showing the amount owed and verification of amounts paid. Also prepare a letter clearly explaining the sequence of events. All of this can better your chances of getting your loan approved. Keep in mind that many mortgage companies may not approve an application if there is an active dispute, regardless of the circumstances. This is in place in an effort to minimize fraud but, unfortunately, can sometimes impact buyers with warranted claims. To be safe, it may be best to fully address credit issues before applying for a mortgageFor more information, contact me Christopher Graves at Emery Federal Credit Union via phone at 781-759-1200 x22 or email email@example.com.