The Best Way to Remove Account In Dispute
If you are applying for a mortgage and your credit report contains accounts that are being disputed, that can cause problems with your mortgage application. The reason being is supposedly when an account is in dispute it no longer has an impact on your credit score, and since mortgage lenders want to have as accurate as possible credit profile for their applicants they don't want any disputed accounts skewing that credit score.
If you are applying for a Fannie Mae loan program, your loan is run through an automated underwriting system (AUS) which is a computer program that analyzes the information from the loan application & your credit report. Fannie Mae's calls their AUS Desktop Underwriter, or "DU" for short. So when running your application & credit through DU, and an account is in dispute, within the DU report (called "findings") there will be a note that says:
DU identified the following tradeline(s) as disputed by the borrower and did not include the tradeline (s) in the credit risk assessment. The lender must verify the accuracy of the tradeline(s) by determining if it belongs to the borrower and by confirming the accuracy of the payment history. If the tradeline does not belong to the borrower, or the reported payment history is inaccurate, no further action is necessary. If the tradeline does belong to the borrower and the reported payment history is accurate, it must be taken into consideration in the credit risk assessment. To ensure it is considered, the lender may obtain a new credit report with the tradeline no longer reported as disputed and resubmit the loan casefile to DU, or the lender may manually underwrite the loan.
Very few lenders are willing to manually underwrite Fannie Mae loans, so if that note comes up on your DU findings, it'll then list the accounts which have been flagged as "in dispute", and you'll need to remove the dispute comments in order for the DU findings to be valid.
If you are applying for a Freddie Mac loan program, a dispute comment will cause an error in their AUS system (called LoanProspector, or "LP" for short) and it won't be able to process your application. There isn't any note in their findings, it'll just come back with an "Incomplete" status (with a code 21).
If you are applying for an FHA mortgage, then only certain disputed accounts need to have the dispute comments removed (otherwise the loan must be manually underwritten, which a lot of lenders do, but you are then subjected to tigher qualifying guidelines). FHA's AUS (called FHA TOTAL) won't have any special notes for disputed accounts, so the underwriter must manually apply FHA's guidelines regarding disputed accounts. FHA states:
If the cumulative outstanding balance of disputed "derogatory credit accounts" of all borrowers is equal to or greater than $1,000, the mortgage application must be downgraded to a “Refer” and an underwriter is required to manually underwrite the loan. If the cumulative outstanding balance of disputed derogatory credit accounts of all borrowers is less than $1,000, a downgrade is not required. Certain accounts are excluded, such as disputed medical accounts & disputed derogatory credit accounts resulting from identity theft, credit card theft, or unauthorized use (however in the latter a letter is needed from from the creditor, or other appropriate documentation to support the dispute, such as a police report disputing the fraudulent charges)."Derogatory credit accounts" are defined as disputed charge-off accounts, disputed collection accounts, and disputed accounts with late payments in the last 24 months. Disputed derogatory credit accounts of a non-purchasing spouse in a community property state are not included in the cumulative balance for determining if the mortgage application is downgraded to a “Refer”. "Non-derogatory disputed accounts" are excluded from the $1,000 cumulative total. "Non-derogatory disputed accounts" include disputed accounts with zero balance, disputed accounts with late payments aged 24 months or greater, and disputed accounts that are current and paid as agreed.
USDA financing's guidelines are:
When an applicant’s credit report indicates a tradeline or public record is in dispute, a GUS underwriting recommendation of “Accept” may need to be downgraded by the lender to a “Refer.” A downgrade is not required if any of the following conditions are met in regards to the disputed item listed on the credit report::
VA financing doesn't have any guidelines regarding disputed accounts, however some lenders may add "overlay" guidelines regarding disputed accounts, to be sure to ask ahead of time.
...The Info You Clicked On This Blog Post For...
I always have my clients deal directly with the credit bureaus when removing dispute remarks. We've had a 100% success rate and is the quickest way to go about it.
Experian
475 Anton Blvd.
Costa Mesa, CA 92626
714-830-7000 is answered by a live human being, tell them you need the Executive Customer Service Team to end the dispute(s), hours are 8AM-5PM Pacific Time
Equifax
1550 Peachtree St, NW
Atlanta, GA 30309
404-885-8300 is answered by a live human being, tell them you need to speak with someone in the Executive Consumer Service department.
TransUnion
555 W Adams St
Chicago, IL 60661
312-985-2000 it has a machine greeting but just stay on the line and you are transferred to a live person, tell them you need to speak with someone in the Special Handling Department, you'll have to wait a little bit as they need to connect to customer service then get it elevated to the Special Handling Department (it is hit or miss, TransUnion often proves to be the most challenging)
If you cannot get the Special Handling Department, then when contacting the normal customer service reps you should say:
I need to dispute the compliance condition remarks code of "AID" (Account In Dispute) because I am no longer disputing the account.
The customer service rep should be able to immediately end the dispute, as in during the phone call.
There are some situations that disputes cannot be ended by the consumer, and must be ended by the creditor, such as if there are multiple disputes on the same trade line. Remember to always be patient with the customer service reps, as they are trying to help you but may have limited communication skills depending on where the customer service call center is based. If there are confusing terms being used, don't be afraid to admit you do not understand what they are saying and ask for them to re-explain or to transfer you to someone in the U.S.
If you are applying for a Fannie Mae loan program, your loan is run through an automated underwriting system (AUS) which is a computer program that analyzes the information from the loan application & your credit report. Fannie Mae's calls their AUS Desktop Underwriter, or "DU" for short. So when running your application & credit through DU, and an account is in dispute, within the DU report (called "findings") there will be a note that says:
DU identified the following tradeline(s) as disputed by the borrower and did not include the tradeline (s) in the credit risk assessment. The lender must verify the accuracy of the tradeline(s) by determining if it belongs to the borrower and by confirming the accuracy of the payment history. If the tradeline does not belong to the borrower, or the reported payment history is inaccurate, no further action is necessary. If the tradeline does belong to the borrower and the reported payment history is accurate, it must be taken into consideration in the credit risk assessment. To ensure it is considered, the lender may obtain a new credit report with the tradeline no longer reported as disputed and resubmit the loan casefile to DU, or the lender may manually underwrite the loan.
Very few lenders are willing to manually underwrite Fannie Mae loans, so if that note comes up on your DU findings, it'll then list the accounts which have been flagged as "in dispute", and you'll need to remove the dispute comments in order for the DU findings to be valid.
If you are applying for a Freddie Mac loan program, a dispute comment will cause an error in their AUS system (called LoanProspector, or "LP" for short) and it won't be able to process your application. There isn't any note in their findings, it'll just come back with an "Incomplete" status (with a code 21).
If you are applying for an FHA mortgage, then only certain disputed accounts need to have the dispute comments removed (otherwise the loan must be manually underwritten, which a lot of lenders do, but you are then subjected to tigher qualifying guidelines). FHA's AUS (called FHA TOTAL) won't have any special notes for disputed accounts, so the underwriter must manually apply FHA's guidelines regarding disputed accounts. FHA states:
If the cumulative outstanding balance of disputed "derogatory credit accounts" of all borrowers is equal to or greater than $1,000, the mortgage application must be downgraded to a “Refer” and an underwriter is required to manually underwrite the loan. If the cumulative outstanding balance of disputed derogatory credit accounts of all borrowers is less than $1,000, a downgrade is not required. Certain accounts are excluded, such as disputed medical accounts & disputed derogatory credit accounts resulting from identity theft, credit card theft, or unauthorized use (however in the latter a letter is needed from from the creditor, or other appropriate documentation to support the dispute, such as a police report disputing the fraudulent charges)."Derogatory credit accounts" are defined as disputed charge-off accounts, disputed collection accounts, and disputed accounts with late payments in the last 24 months. Disputed derogatory credit accounts of a non-purchasing spouse in a community property state are not included in the cumulative balance for determining if the mortgage application is downgraded to a “Refer”. "Non-derogatory disputed accounts" are excluded from the $1,000 cumulative total. "Non-derogatory disputed accounts" include disputed accounts with zero balance, disputed accounts with late payments aged 24 months or greater, and disputed accounts that are current and paid as agreed.
USDA financing's guidelines are:
When an applicant’s credit report indicates a tradeline or public record is in dispute, a GUS underwriting recommendation of “Accept” may need to be downgraded by the lender to a “Refer.” A downgrade is not required if any of the following conditions are met in regards to the disputed item listed on the credit report::
- The disputed account has a zero balance
- The disputed account is marked as "paid in full", or "resolved"
- The disputed account is both
- less than $500, and
- more than 24 months old, based on the date of dispute
VA financing doesn't have any guidelines regarding disputed accounts, however some lenders may add "overlay" guidelines regarding disputed accounts, to be sure to ask ahead of time.
...The Info You Clicked On This Blog Post For...
I always have my clients deal directly with the credit bureaus when removing dispute remarks. We've had a 100% success rate and is the quickest way to go about it.
Experian
475 Anton Blvd.
Costa Mesa, CA 92626
714-830-7000 is answered by a live human being, tell them you need the Executive Customer Service Team to end the dispute(s), hours are 8AM-5PM Pacific Time
Equifax
1550 Peachtree St, NW
Atlanta, GA 30309
404-885-8300 is answered by a live human being, tell them you need to speak with someone in the Executive Consumer Service department.
TransUnion
555 W Adams St
Chicago, IL 60661
312-985-2000 it has a machine greeting but just stay on the line and you are transferred to a live person, tell them you need to speak with someone in the Special Handling Department, you'll have to wait a little bit as they need to connect to customer service then get it elevated to the Special Handling Department (it is hit or miss, TransUnion often proves to be the most challenging)
If you cannot get the Special Handling Department, then when contacting the normal customer service reps you should say:
I need to dispute the compliance condition remarks code of "AID" (Account In Dispute) because I am no longer disputing the account.
The customer service rep should be able to immediately end the dispute, as in during the phone call.
There are some situations that disputes cannot be ended by the consumer, and must be ended by the creditor, such as if there are multiple disputes on the same trade line. Remember to always be patient with the customer service reps, as they are trying to help you but may have limited communication skills depending on where the customer service call center is based. If there are confusing terms being used, don't be afraid to admit you do not understand what they are saying and ask for them to re-explain or to transfer you to someone in the U.S.
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