A word to all potential home buyers that are working on rebuilding your credit. If you enter a credit repair program to fix your credit it is best to have all disputes removed prior to shopping for a mortgage or entering into a purchase contract. When you dispute an item on your credit report, you are essentially receiving a score that does not take that item into effect that negative credit item. So let's say that you go through credit repair and see that you have a 640 score, finally!.. and you make the call to leave the program prior to getting the remaining disputes removed. You go to a lender who runs the credit and pulls your 640 score and issues you an approval and you go into escrow on your first home. What happens next is the loan goes to underwriting after you have already put up your earnest money and the underwriter and you receive your approval and sure enough there is a condition for you to remove the dispute. Your loan officer is now scrambling to try and get the dispute removed and if he/she is good at what they do they will be able to complete a rapid rescore within a few days and not have to wait the 30 to 45 that it may take by sending letters to the bureaus. If you make it past the obstacle you still run the possibility that once that dispute is removed that your score will drop below the required minimum and you could be out of luck.

So if you have any disputed accounts that are not resolved, get them resolved and the dispute comments removed off of your credit report prior to getting a mortgage. Now with this being said, there are a lot of excellent loan officers out there that would identify this upon application and work to get the disputes removed prior to sending you to underwriting. There are also loan programs that will allow you to keep a dispute on credit. My suggestion would be to not take a chance, and to finish the credit repair program or if you are not in a credit repair program but just have items you are disputing to go ahead and resolve the dispute. Entering in the dispute comments does not help you on a credit perspective, only if the item is removed from the bureau.

Good luck and thanks for reading!

Eric Blossman

NMLS 211144