Credit Disputes Gone Bad

Jun 30, 2011

For years, you could dispute anything on your credit report that you believed to be inaccurate and the act of doing so would not be counted against you. While you still can dispute anything on your credit report according to the Federal Credit Reporting Act, you might want to think twice before doing so. Both Fannie and Freddie, two of largest Government Sponsored Enterprises (GSEs) backing mortgage loans, felt too many consumers were trying to repair their credit improperly, thus making these folks poor risks for lending purposes.  As a result of this judgment, they implemented a new criteria for the lenders.

As always, when you place a dispute, whether you are disputing an amount or that the account is even yours, a statement will be added to that trade line on your credit report that reads, “disputed by consumer”. When you apply for a new mortgage or a refinance, you are no longer able to rely on any trade line with this description. You may have disputed something 5 years ago or 5 months ago, nonetheless you may be penalized by underwriters in that they will exclude any history that may be helping your credit score. You will either need to have the trade line completely removed or the statement removed — neither of which is an easy task and, in some cases, nearly impossible.

Here are some tips to help you so that you don’t fall into this senseless trap:

  1. Only dispute something that you know for a fact will be removed from your credit report;
  2. If you need to dispute something, do so with the creditor first; and,
  3. Speak to your mortgage broker, Realtor® or credit counselor for advice on the correct way to approach the situation.

Under all circumstances, be very cautious when you dispute any items on your credit report.

My Best,
Sarah Kahley-Rufo

A+ Credit Consulting LLC.

PMB 280449

Lakewood, CO 80228


303-778-2314 (Fax)

720-427-3921 (Cell)

800-381-2626 (Toll Free)



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