Credit Disputes Can Delay Your Mortgage Application Even if they are Legitimate!
All lenders are requiring any disputed account on a borrower’s credit report to be resolved or the dispute removed before the loan can be approved. The reason for this is that unscrupulous “credit repair” or “credit fixer” companies have told consumers how to use (abuse) the Fair Credit Reporting Act to falsely inflate the consumer’s credit scores.
The Fair Credit Reporting Act allows for any consumer to dispute any credit account or payment history rating they believe to be incorrect. The Act requires that any account that is under “dispute” be omitted or neutralized and not considered in determining the consumer’s credit score. This Law is in place to protect innocent consumers from erroneous credit reporting.
The “Bad Guys” have used a law that is designed to protect consumers from false or erroneous reporting and have used it to help consumers with truly bad credit get their credit scores inflated temporarily. This became such a common practice that “advising a consumer to dispute everything on their credit report” has now become a “Red Flag” of mortgage fraud.
Unfortunately, honest consumers who are disputing incorrect information on their credit reports have to either remove the dispute or get it resolved before they seek a new residential mortgage loan.
Why Credit Doctor is Different
Metro Brokers Financial has a product called “Credit Doctor”. You may be thinking “but Judy, you just told us that ‘credit repair’ companies are the ‘bad guys’!” Well, the good news is MBF’s Credit Doctor is not a credit repair company, but an online tool that examines your credit and then gives you suggestions on recommended actions to fix it. It also provides you with your credit score.
Do you have questions regarding credit disputes or “credit repair” companies? Comment below and I’ll be happy to answer your questions.