Disputed Credit Derogatory Credit Account refers to disputed charge off accounts, disputed collection accounts, and disputed accounts with late payments in the last 24 months. If the credit report indicates that the FHA mortgage applicant is disputing derogatory credit accounts, the FHA mortgage applicant must provide a letter of explanation and documentation supporting the basis of the dispute. If the disputed derogatory credit resulted from identity theft, credit card theft or unauthorized use balances, the mortgagee must obtain a copy of the police report or other documentation from the creditor to support the status of the accounts. If the FHA mortgage applicant has $1,000 or more collectively in Disputed Derogatory Credit Accounts, the lender must include a monthly payment in the FHA mortgage applicant’s debt calculation. The following items are excluded from the $1,000 cumulative balance:
• Disputed medical accounts; and
• Disputed derogatory credit resulting from identity theft, credit card theft or unauthorized use.
• Accounts of a non-borrowing spouse in a community property state
If an FHA mortgage applicant is disputing non-derogatory accounts or is disputing accounts which are not indicated on the credit report as being disputed, the lender must analyze the effect of the disputed accounts on the FHA mortgage applicant’s ability to repay the loan. If the dispute results in the FHA mortgage applicant’s monthly debt payments utilized in computing the DTI ratio is less than the amount indicated on the credit report, the FHA mortgage applicant must provide documentation of the lower payments. Non-Derogatory Disputed Accounts include the following types of accounts:
• disputed accounts with zero balance;
• disputed accounts with late payments aged 24 months or greater; or
• disputed accounts that are current and paid as agreed.
DISPUTE REMOVAL EXAMPLE LETTER
1234 Example Lane
Loveland, CO 80538
Capital One; 1234567899876543
To whom it may concern,
I am no longer disputing any information on the above-referenced account.
Please remove the dispute comments from my credit report.
John Doe’s signature
(111) 222- 3333
DISPUTE REMOVAL INSTRUCTIONS
Attached on the phone numbers to the bureaus, you can call them to have the disputes removed from your report, be sure to get a time frame of when to expect the disputes to be removed so you know when it will be a good time for your lender to pull credit.
When calling you want to have the account name and number available
Tell them the disputes showing on your report are hindering your ability to qualify for you home loan
Get a time frame from them on when you can expect the disputes to be removed
1. TransUnion: 1-800-916-8800 9 am – 4:30 pm EST File #
Press 4 to speak with an operator, and then press 1 to enter your file #, enters your file #. After those steps are completed your call should be transferred to a live person
2. Equifax 800-846-5279 8AM-5PM Eastern Time Confirmation #
Listen to the “welcome recording” your call should then be transferred to a live person
3. Experian 1-800-360-7580 8AM-5PM Pacific Time Report #
Once the recording comes on listen to the options:
You will be asked if you have a copy of your credit report, press 1.
Next you will be prompted to enter the report number (found above in red), the recording will repeat the report # to you, if it is correct press 1 if it is incorrect press 2.
After you have entered the correct report # press 1
It will then ask if you want to take a survey at the end of the call, press 2 for NO
The system will ask if you have questions about your credit report, press 1.
It will then ask if you are calling about an item that you disputed, press 1.
Press 2 when it asks if you have any questions regarding your results.
You will then be placed on hold for about 2-3 minutes, your call will then be picked up by a live person who can assist you with getting the disputes removed.