Everyone has the ability to dispute mistakes on their credit report. However, home buyers must be aware of the affect that it can have on obtaining financing. This article offers important information on disputed trade lines and the impact on Portsmouth NH home purchases.
Preparing for a Real Estate Purchase
If you are planning to buy real estate in the future, be sure to review your credit score far in advance. This allows you the opportunity to find and resolve mistakes prior to applying for a mortgage. Ideally, you would want any disputes finalized before beginning the home purchase process. If you do have any active disputes, inform your mortgage consultant early in the process. Do not assume that it was seen on your report at the pre-approval stage.
What Are Disputed Trade Lines
If you find a mistake on your credit report, you have the right to correct it by sending information to the credit bureaus. A notation is added to your credit report and the accounts are considered disputed trade lines. Credit bureaus may choose to ignore the particular items when compiling your score, so they might not affect your score during that time. Typically, the notation is removed once the mistake is resolved and, if necessary, the proper corrections are completed. This process may take many months. Although you may not see a negative impact on your score, the information on the dispute may result in other issues.
Disputed Trade Lines And The Impact On Portsmouth NH Home Purchases
Many lenders use electronic underwriting systems. Your credit score and other elements of your credit report are evaluated by this system. Disputed trade lines may cause a home loan to be rejected or diverted to manual underwriting. Gather all documents and information related to the disputed trade lines. If it was a charge that you settled but was not correctly reflected in the credit reports, have statements showing the debt owed and confirmation of amounts paid. Also write a letter clearly detailing the sequence of events. This will better your chances of getting your financing approved. Keep in mind that some lenders will not approve a loan if there is a pending dispute, regardless of the legitimacy of the claims. This is implemented in an effort to reduce fraud but, unfortunately, can often impact consumers with warranted claims. To be safe, it is best to fully address credit mistakes before submitting an application. It is important to speak to a mortgage consultant for personalized advice on your mortgage needs. To be referred to a local professional, John Wells at Wellsco Realty at 978-518-1481 or firstname.lastname@example.org.