It’s Our Right to Dispute Items on the Credit Report

According to the Fair Credit Reporting Act (FCRA), consumers have the right to dispute anything on the credit report regarding an account’s accuracy or verifiability. In fact, our dispute activity is based on this federal law. When an account is disputed and deemed inaccurately reporting, or if the account is not verified within 30 days, then it must either be corrected or removed from the credit report.

While it’s the consumer’s right to post up to a 100-word statement on the credit report for each account, we DON’T post any comments on behalf of customers in our dispute activity. However, this doesn’t prevent the creditor from posting “consumer dispute statements” on a credit report. In fact, creditors often place consumer dispute statements on accounts even when no dispute is made with the credit reporting agencies. If an account is disputed directly with the creditor, even by making a phone call to correct a mistake on billing, the creditor often will post a consumer dispute statement on the credit report….which remains there indefinitely!

Consumer Dispute Statements Can Prevent Approval for Mortgage Financing – Since 2010, most mortgage lenders have adopted the practice of denying approval for mortgage financing if there are “consumer dispute statements” on the credit report….regardless of how high the credit score is.

Credit Restoration & Consumer Dispute Statements

Disputing accounts on the credit report does cause consumer dispute statements to be placed on the accounts disputed during the investigation process. If a credit report is pulled during the investigation period, statements such as “Account in dispute – investigation in process” will appear. Once the investigation process is completed, many of these statements will be removed. It is the credit reporting agency that places these statements on the credit report. For this reason, it is advised that mortgage lenders refrain from pulling a credit report until the completion of the investigation period.

After enough derogatory accounts have been deleted from the credit report and all dispute investigations are completed, then a credit report should be pulled to confirm that the needed credit score is achieved. Once the credit score is high enough for lender guidelines, and there are remaining consumer dispute statements on the report, then removal of these statements can be pursued.

When there is no dispute in process, and you find consumer dispute statements on the credit report, then these are the result of the creditor posting this statement there. It will typically show up as, “Consumer disputes this item” or “Account disputed by consumer”. While these remaining consumer dispute statements have no impact on the credit score, it has become an obstacle for consumers in obtaining mortgage financing.

Removing Consumer Dispute Statements

There are three things that can be done to get consumer dispute statements removed:

1) We send a letter to the credit reporting agencies stating that the accounts showing these statements are reporting accurately and not in dispute, and request that the consumer statements be removed from the credit report.

2) We also prepare a letter for the customer to send to the creditor stating that the account is no longer disputed, and request removal of the consumer dispute statement from the credit report.

3) The consumer should also call the creditor requesting a letter confirming that the account is no longer in dispute. Speaking with the creditor can speed up the process considerably. If the creditor sends a letter to the consumer that the account is no longer in dispute, then this can be used by the mortgage loan officer to correct the credit report using the “rapid rescore” method with the credit issuer. This is about a 7 day process and costs about $30/account per credit reporting agency.

Sample Letter to Creditor to Remove Statements

Customer Name
Address
City State Zip

Creditor Name
Address
City State Zip

Re: Account # xxxxxxx

Date

To Whom It May Concern:

This letter is to notify you that you have posted a “Consumer Dispute Statement”
on my credit report that is preventing me from obtaining mortgage financing. While it is my right to post a consumer statement on my credit report with credit
reporting agencies, I have not requested that a consumer statement be posted on
the accounts listed above.

The account history information reporting on my credit profile with the three major credit reporting agencies (TransUnion, Equifax and Experian) for the accounts listed above are reporting accurately and are not in dispute. Please remove all consumer dispute statements from my credit profile as reported to the credit reporting agencies by your company.

Sincerely,

 

 

________________________

 

 

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