Because your credit plays
such an important role in the loan process, it's important to
note that credit reports are not always right, and erroneous
information can sometimes appear on your credit report, which
may hinder you from getting a better mortgage rate, or even
a loan approval.
If you have discovered an error on your credit report, you are
entitled to dispute the accuracy. The federal Fair Credit
Reporting Act gives you the right to challenge inaccurate
information by contacting the reporting agencies, and the
company who reported the information. Under the FCRA,
they are responsible for correcting any errors on your credit
report free of charge.
Your dispute must be investigated by the credit reporting
agencies within 30 days of reporting an error. They will
contact the source of the derogatory information to confirm
your credit record. Providing documentation to support your
claim, if you have any, can also expedite the process.
When you apply for a mortgage,
your lender will order a credit report from each of the three
national credit reporting agencies. If incorrect data is reported, a dispute can be
submitted to each credit agency that is showing the inaccurate
information. Once the problem is resolved, your lender can
re-order your report to reflect the changes, and will hopefully
show improved credit scores.
Disputing credit errors can be started online at the credit
agencies: Equifax, Experian, Transunion.