38 replies to this topic

[BoostMyScore]

I have 2 tradelines on my credit reports that are negative. Both are for late marks. I have disputed both of them in the past, but the disputes haven't been open for 3 months.

In looking at my CR, I see the following in the comment section:

Wells Fargo Home Mortgage
Consumer disputes this account information,
Freddie Mac account

Nelnet Student Loan
Consumer disputes after resolution,
Refinanced

Will having "consumer disputes" in the comment section for these 2 raise red flags for mortgage approval? Should I contact Wells Fargo and Nelnet and ask that they update the comment section with the 3 CRAs? Thanks.

[liverichly]

Yes have the disputes ended before you apply or you won't be able to qualify for a conventional mortgage - FHA, VA & USDA mortgages have to be manually underwritten (per some recent guidance from HUD, that may be changing if underwriters start using a little more common sense). Sometimes they can just be comments, but sometimes they can be active disputes. If you don't care and are curious, you can have your credit checked first and see.

[Brian B The Loan Professor]

+1 Deal with it now and avoid headaches later

[squarepusher]

I am dealing with EXACTLY this headache right NOW! I am waiting on HSBC to fax me a letter stating that they will remove the notation from all three bureaus and that there is no dispute on the accuount, luckily I actually have a person that is working on this now at HSBC and I have all of their contact info. Crappy part is I am in escrow. Loan Officer said that he still needs to send the letter to CREDCO(company that pulls the scores) and have them update my credit report to the lender so that it does not have those remarks. Will they do a rescore or just remove the comments fom all three bureaus with a letter from HSBC on company letterhead and a contact person/info?

[squarepusher]

The HSBC Guitar Center account was an OLD positive account showing PAID IN FULL & NEVER LATE. The loan I am applying for is an FHA loan. I'm mad because this wasnt discovered until right before the FINAL UNDERWRITE. FUMING!!

Edited by squarepusher, 21 April 2011 - 10:43 AM.

[liverichly]

Looks like they'd do a rapid rescore.

[squarepusher]

Liv...is a rapid rescore something that can be done quickly or will it take some time fore them to convince the bureaus that those remarks should be removed with the letter from HSBC. My contact at HSBC gave her direct contact info and said to pass it along to CREDCO so that this could get straightened out immediately since it was a good account. I couldnt understand why that notation was on there to begin with? I wonder why this doesnt come up more often? I told the loan officer this is something I could have take care of last month while I was still home shopping.....ugghh.

[squarepusher]

also if they do a rapid rescore what if something changed on my credit before then? will that reflect on my rapid rescore? I just check my scores on MYFICO and they have not dropped much bu the inquiries did drop it a bit, but I'm confident that my midscore is still above 640, which the lender's cut-off.

[liverichly]

The whole issue with disputes is that the lenders assume that it impacts a credit score, because a disputed account is omitted from the credit score calculation and the automated underwriting findings - however I personally have not found either of those to be true, yet underwriters are still concerned. So the underwriter wants the dispute removed, the scoring based on that account not being in dispute, and then the automated underwriting system to analyze a new credit report without those disputes.

Personally I never do a rapid rescore to remove dispute comments, I do conference calls with my clients directly to the credit bureaus and they are removed within a day or two, sometimes the same day. However the rapid rescore process is the same for removing dispute comments as it is with removing a late, etc. Letter is generated by creditor -> loan officer sends it to credit vendor -> credit vendor sends letter to the 3 credit bureaus -> 3 credit bureaus confirms with creditor the information in the letter is true -> credit report is updated -> new credit report is pulled showing all changes (not just the information that was the reason for the rapid rescore). Sometimes it can be a 1-2 day process, sometimes it can be 3-4.

[squarepusher]

"Personally I never do a rapid rescore to remove dispute comments, I do conference calls with my clients directly to the credit bureaus and they are removed within a day or two, sometimes the same day."

Does the above still involve running scores again???

[liverichly]

Yup, it does. Anything will involve re-running credit

[squarepusher]

Only thig that worries me about the rescore is that on another entirely different account with HSBC Equifax has been updating monthly that the account is Charged-off. The account says settled for less than full balance and have a balance of $0. This account Charged off in Nov 2009 and they have been putting charge-off every month since then but my score has hardly been affected by this. On MYFICO equifax is reporting that i've been 90+ days late every month since Nov 2009, with one month being reported as OK (May 2010 which is the month I settled the account and paid) then after that, again CO(90+ late) up to last month. I hope this does not get me denied.

[liverichly]

Was the HSBC account reporting that way when your credit was initially ran?

Have you contacted HSBC about the way it is reporting?

[squarepusher]

no it was not. It showed that the account was charged off but didnt show any late payment history at all, then one month they started reporting CO every month as late payments, I think it happened when they tried to rapid rescore the first time when CREDCO wanted to see if the score would get to 660 by eliminating the fact that the account was showing a past due balance. They were able to get rid of the past due balance but then Equifax started reporting lates. CREDCO did this with a letter I got from HSBC stating that I no longer owed any $$ to them and that my obligation was fulfilled, but then they added the lates. Now i'm afraid when they do the rapid rescore those lates are going to show up. But on MYFICO it only dropped my score for equifax like 8 points, from 651 to 643

Edited by squarepusher, 21 April 2011 - 05:56 PM.

[liverichly]

You should get a letter from HSBC stating when the account was paid in full & closed, then along with the dispute removal letter, both the lates & dispute comments can be removed at the same time.

[squarepusher]

The dispute removal letter is on another PAID IN FULL HSBC account that was never charged off and was NEVER late.

The charged off account is yet a different HSBC account that was charged off in Nov 2009 and I received a letter that this particular account was settled in Dec 2010 and that I no longer owed them anything. After that HSBC started reporting lates in the form of "CO" every month after the date that it originally charged off, NOV 2009 until now...even last month they reported "CO".

[liverichly]

You can do a rapid rescore on more than 1 trade line at a time. If you don't get something for the other HSBC account that is reporting charge-offs, the underwriter is probably going to wonder what is going on with that account once they see charge-off remarks for nearly 2 years up until the day credit was run. They may compare it to the old report and wonder why it reported differently, but they still use the newest credit report when they sell a loan and they have to justify why they approved it - very difficult with that type of credit history being reported. I'd call up HSBC tomorrow regarding that letter.

[squarepusher]

I just stopped by the lenders office and the loan officer showed me the actual report done by CREDCO about 2 weeks ago and it is showing the remarks the same as my recent MYFICO pull and it shows late from the day it CO so I guess it's okay...he said it was okay cause the account shows as CHARGED OFF on Nov 2009 and he said that he put it through DU and it didn't say anything about the CO plus since they're a direct lender he said that they dont care about CO's as long as they are showing that they are over a year since CO and less than $5k so all he is doing is the rapid rescore to get rid of the remarks of disputed from the OTHER good account and as long as my mid score is over 640 then he'll submit to underwriter for final decision. He is confident that the loan will get approved. Strong income, dti is excellent, job stability great(government engineer for 10 years), so as long as score comes out over 640 he said good to go. I hope he is right.

Live.....thank you for all of your commenting. You and the rest of the brokers/lenders do us novices a great service. I appreciate all the time you have spent thus far.

[liverichly]

Welcome. Hope it works out for you the rest of the way.

[nferra2]

After reading this I checked my reports, almost every single item on my report says disputed by consumer. What is the best way to go about getting these comments removed?

[Brian B The Loan Professor]

After reading this I checked my reports, almost every single item on my report says disputed by consumer. What is the best way to go about getting these comments removed?

You need to contact The bureaus and ask for the “Executive Customer Service Team” which will help you end the dispute. On your report there should be phone numbers to do this......otherwise you can google them
It will take some work to get through to someone but once you do they can usually get this done very quickly
a report that has all items in dispute will have a tough time with almost any underwriter as this is the practice that led to this guideline change -
Good Luck
B

[squarepusher]

i would add that if its a dispute that originated from a dispute with the creditor and the creditor is notating the dispute then you have to have the creditor end the dispute and remove the notation and even send you a letter stating such and that will give you a bit more leverage with the bureaus. Dont find out about this in underwriting when in escrow or you'll be a wreck like me. ;-) Luckily all has been resolved and I should have a rescore by Monday or Tuesday since i already got alerts that the notation has been removed from Equifax and Experian....hopefully transunion.

[Brian B The Loan Professor]

Good Point I should have been clearer - imy method only works if this was a dispute you started - be going to the bureaus direct - if you went to the creditor and disputed and they listed then it is a little more complicated..........


the whole reason for this is people were going and disputing everything on a report as a quick fix to their scores - it worked too - but the banks wised up and the system was changed -

[nferra2]

I'll start calling. I got my score up from a 540 to a 668 and I made 12 months good payments "Bond for Deed" so hopefully I can get this thing refinanced to a traditional mortgage in the next month or so. I just paid my CC's off again, so I should see a May bump when my balances report. I had been going through cycles of using them and paying them off to get my limits ups, nearly tripled them since Christmas time.

All the disputes are in the consumer comment section, none in the creditor comment sections.

[nferra2]

Another question, can I just ask them to remove all disputes, or do I need to go line by line with each account?