Don’t Be Blindsided at the Last Moment
Most of us have very little knowledge on the nitty-gritty details of our financial history. People are often surprised to find problems with their credit report that they had no idea existed.
In many cases these problems are a result of errors in the credit reporting system or minor difficulties that the person thought they had solved many years ago. Talking to a lender and qualifying for a loan before you start your home buying process will provide you with ample time to identify and solve these problems and to correct errors. If you try to solve these issues during the 17 days provided for in a typical real estate purchase contract, you will probably be unsuccessful.
Generally, the higher your credit score, the better loan you’ll qualify for. To qualify for a mortgage, you’ll need to meet the lender’s credit qualifications which may vary by lender but you typically need a minimum credit score of 620 for government loans and 680 for conventional loans.
[blockquote]Look at your credit report at least 60-days before you start the home buying process. This gives you the time to clean up any past issues and make sure there are no inaccuracies or mistakes. If you’re below the qualifying range for a loan, you may need to spend time rebuilding your credit or come up with a larger down payment.[/blockquote]
How to Dispute Credit Report Errors
Remove Credit Report Errors with a Credit Report Dispute
Note The Items That Can Be Disputed
Technically, you can dispute anything, but note the credit bureau will do an investigation and only delete items that law requires them to delete. You can dispute credit report items that are inaccurate, incomplete, out of date, or that you believe cannot be verified. Negative items, except bankruptcy, should only appear on your credit report for seven years – bankruptcy can remain for ten. If you have negative entries older than seven years, you can dispute them. Other things you can dispute include:
Payments reported late that were actually on time
Accounts that aren’t yours
Inaccurate credit limit/loan amount or account balance
Inaccurate account status, for example an account status reported as past due when the account is actually current
Decide Which of Three Ways You Want to Make Your Dispute
You can place your credit report dispute online, by mail, or over the phone. To dispute online or by phone, you need to have ordered a copy of your credit report within the past month – you’ll need to provide your credit report number.
While disputing credit report errors online is convenient, there are some drawbacks. When you dispute online, you can only get the results of your dispute online. If you dispute online, you can also check the status of your dispute online by providing your confirmation number, but you can only get the results online, not by mail. And you’ll still have to mail in any documentation or proof that supports your dispute.
Should you decide to dispute your credit report online, here are links to the major credit bureau pages for submitting an online credit report dispute:
Making a credit report dispute by mail takes more time, but gives you the paper trail you’d need if the credit bureau doesn’t respond in a timely manner. Credit bureaus have 30 days to investigate and respond to your credit report dispute, or 45 days if you send additional proof during the investigation period. If they don’t respond in that time frame, you have the right to sue in Federal court for up to $1,000.
When you dispute via mail, you should write a letter explaining the information that should be removed and include the reason that detail is inaccurate. Also include proof of the error if you have it. Send the letter via certified mail with return receipt requested so you have proof of when you made the dispute and when the creditor receives it. Make sure you keep track of the time that’s passed.
Sample Phrasing for a Dispute Letter
Here are a few different ways to word your dispute letter. Makes sure you tailor the dispute to fit your circumstances.
I’ve reviewed a copy of my credit report and found an error with GE Capital Account XXXX-XXXX-XXXX-1234. The account is listed as 30 days late. However, I have never been late on this account. Please remove this inaccurate information.
I’ve reviewed a copy of my credit report and found a number of negative accounts that are older than seven years. Here are the accounts that should be removed:
Verizon Visa XXXX-XXXX-XXXX-XXX
I've reviewed a copy of my credit report and found an error. The account with Chase XXXX-XXXX-XXX-3456 is not my account. I have never had an account with Chase Bank. Please remove this account from my credit report.
Dispute Addresses for the Major Credit Bureaus
P.O. Box 7404256
Atlanta, GA 30374-0256
P.O. Box 9701
Allen, TX 75013
P.O. Box 2000
Chester, PA 19022-2000