All consumers have the ability to dispute incorrect items on their credit report. However, home buyers should be aware of the impact that this may have on getting financing. This blog provides important details on disputed trade lines and the effect on MA financing.
Getting Ready for a Real Estate Purchase
If you are thinking of buying real estate in the future, be sure to review your credit report far in advance. This allows you the time to find and resolve errors well before you apply for a mortgage. Preferably, you would want any disputes addressed before beginning the home purchase process. If you do have any active disputes, notify your mortgage consultant early in the process. Do not assume that it was noticed on your report at the pre-approval stage.
What Are Disputed Trade Lines
If you identify a mistake on your credit report, you have the ability to correct it by submitting a request to the three credit bureaus. A notation is made in your credit file and the accounts are considered disputed trade lines. Credit bureaus may opt to ignore the specific items when determining your credit score, so they might not lower your score while in process. Usually, the notation is removed once the mistake is settled and, if applicable, the proper corrections are completed. This process may take several months. Even though you may not see a reduction of your score, the details of the dispute can lead to other problems.
Disputed Trade Lines And The Effect On MA Financing
Many mortgage companies use electronic underwriting systems. Your credit score and other elements of your credit report are evaluated by this system. Disputed trade lines may lead a home loan to be rejected or sent for manual underwriting. Gather all documents and information related to the disputed trade lines. If it was a charge that you paid off but was not properly reflected in the credit reports, have statements showing the debt owed and confirmation of payments made. Also write a letter explaining the situation. All of this will improve your chances of having your mortgage approved. Keep in mind that some lenders will not approve an application if there is a dispute on file, regardless of the legitimacy of the claims. This is in place in an effort to minimize fraud but, unfortunately, can sometimes impact consumers with warranted claims. To be safe, it may be best to fully address credit mistakes before applying for financing. It is important to speak to a mortgage consultant for individual advice on your mortgage needs. To be referred to a local professional, Bradford Pratt at REMAX on the Charles at 877-481-5544 or firstname.lastname@example.org.