How To Remove Credit Disputes
In this guide on Non-QM Mortgage Brokers, Inc., we will cover how to remove credit disputes so you can qualify for a mortgage loan. You cannot have credit disputes during the mortgage process on non-medical collections and derogatory credit tradelines. There are certain types of disputes that do not have to be distracted during the mortgage process. You will learn why mortgage lenders do not want consumers to have active credit disputes on non-medical collection accounts and derogatory credit tradelines. We will show you how to remove credit disputes so you can proceed with the mortgage process.
Why Do I Need To Know How To Remove Credit Disputes For Mortgage?
There is a good reason why you cannot have active credit disputes during the mortgage process. When a consumer disputes a negative credit tradeline, the credit bureaus will post a consumer dispute comment on the consumer’s credit report to the fact the consumer disputes the particular credit tradeline. The credit dispute comment will automatically negate the derogatory credit tradeline from the credit scoring formula.
What Happens To Your Credit Scores If You Remove Credit Disputes?
If a consumer disputes a recent negative credit tradeline such as a recent collection account or late payment, that negative credit tradeline will no longer be factored in the credit score. Therefore, since the derogatory tradeline is being disputed, consumer credit scores will increase. On the flip side, if the credit dispute is removed, then the credit scores will go down. If another example, credit scores can go up if credit disputes are removed from a positive credit tradeline.
If I Remove Credit Disputes For Mortgage, Will My Scores Drop?
We will show you the mechanics of the credit process for mortgage lenders where you get a full understanding of how your credit scores and credit report factor in your mortgage qualification and approval process. Furthermore, we will go over which credit scores lenders use and how long the qualifying credit score is valid.
Will Credit Disputes Hurt My Credit Scores?
One of the most FAQs we get at Non-QM Mortgage Brokers, Inc. is what happens if your credit scores change during the mortgage process.
No. The act of disputing items on your credit report does not hurt your score. Actually, if you are disputing derogatory credit tradelines, it will increase your credit scores. Whenever consumers dispute credit tradelines, the credit bureaus will automatically factor the disputed item from the credit scoring model. Therefore, the disputed item is nonexistent per the algorithm of the credit bureaus to be taken the negative factor in the credit scoring formula. However, the outcome of the dispute could cause your score to adjust. If the “negative” item is verified to be correct, for example, your score might take a dip.
What happens if your credit score plummets or increases substantially? All of these questions will be answered in this guide on how to remove credit disputes during the mortgage process.
Credit Disputes and How To Remove Credit Disputes?
Oftentimes you hear people say “ I wish they taught us about credit in school”. I, for one, agree! One’s personal credit has a massive impact on your day to day life. If you are taught at an early age the importance of your credit score and the ins and out’s of monitoring it, it will set you up for success as life progresses. Financial responsibility is something that is not taught but the individual needs to believe in it, live by it, and swear by it. It is not what you make but rather what you spend.
The most financially responsible person can run into bad credit, collections, late payments, and ultimately bankruptcy. What happens if you lose your job? What happens if another crisis like the COVID-19 outbreak hits the nation? What happens if you need to close your business not because your were financially irresponsible but because the industry you are in collapsed such as the movie rental business, pager and telecommunications business, and computer specialty stores.