How to Remove a Disputed Account From Your Credit Report
Last Updated: March 30, 2017
One piece of the credit repair process is to dispute any erroneous and/or inaccurate information found on your credit report with the credit reporting agencies. Let's say you reviewed your credit reports and you see there is an account marked with a late payment but you are sure you paid this account on time, all the time. You mail a letter to the reporting credit bureau disputing this late payment. After 30 days, you get a letter saying they are investigating and now the account is marked "Dispute Status" on your report. This can be a bad thing if you are trying to apply for a mortgage or any type of credit. Learn why having a disputed account on your credit report can hurt you and what to do about getting it removed.
Why is it Bad to Have an Account Showing a Disputed Status?
Let's say you are getting ready to buy a house and you are reviewing your credit reports to see if there is anything negative on them. But low and behold, you see an account (or two) with inaccurate information and this is lowering your credit score. So you do what we have been preaching to you to do and you mail a dispute letter to the bureaus.
If you dispute an account with your creditor, a lender may not like seeing that on your credit report. In fact, lenders feel this shows a potential for future liabilities that may impact your ability to repay the debt, such as a mortgage. It may seem unfair to think if you feel you have a genuine dispute on an account that this could prevent you from getting a mortgage or any other type of loan.
So, if you do have a disputed account on your credit report, be prepared to submit a letter of explanation and/or documentation to the lender supporting why this account is in dispute. But doing that is no guarantee they will overlook this dispute and grant approval on your loan. Chances are your loan will be denied.
Why You Want to Dispute an Account in the First Place
Let's tackle when you should dispute an account in the first place and this takes some planning ahead. If you are in the very early phases of buying a home, we suggest you pull your credit at least 6 months prior to actually applying for a loan. Let's say you are renting an apartment and your lease it up in 6 moths or so. You and your partner are thinking about buying a home when your lease is up and you are just starting to look at homes that are on the market. It is at this time you should pull your credit and see what is on there and dispute any negative items. Doing it this far in advance will give you plenty of time to mail out dispute letters and resolve any outstanding issues that may arise well before you actually put pen to paper and apply for a loan.
Why you will want to dispute an account on your report is if you disagree with the accuracy of the information listed. Reasons for inaccuracy may include:
- Incorrect balance listed
- Interest rate is incorrect
- Late payments listed that were not late
You may also need to dispute information on your credit report if you were a victim of identity theft or fraud. In those circumstances, you will want to dispute any and all credit accounts that were fraudulently opened or unauthorized credit inquiries.
How to Get a Dispute Status Off Your Credit Report
The following tips can be used to get a dispute status off of your credit report. The best case scenario is that you have a few months to take care of this, but if you need to get this done in a hurry, these tricks will work, too. Make sure you acquire all three credit reports to verify if the dispute is showing on all the bureaus or just one or two of them.
If the disputed account is showing on your TransUnion report, you can call them directly at 800-916-8800 to request a customer-initiated dispute be removed and they will do it immediately.
At Equifax, you will need to write to Equifax Consumer Services LLC, P.O. Box 740256 , Atlanta, GA 30374-0256, requesting that the dispute be removed from your report.
As for Experian, they state the dispute should fall off a credit report automatically once the dispute is resolved. In this instance, they said, you would be entitled to an extra free report because the loan has been delayed by the dispute statement. Go to www.experian.com/reportaccess and follow instructions to get a free report, indicating that adverse action was taken. If the dispute statement is still there, the free report will show it, and will also provide contact information to get in touch with Experian, if need be.
Lastly, if you have credit accounts in dispute, the best thing to do is to pay it off to remove the dispute. You can contact the creditor directly and negotiate a settlement so that in turn they will remove the disputed status. If you take this approach, make sure the creditor changes the reporting status from "account in dispute" to "no longer reported as disputed."
The best advise is to not dispute anything just prior to applying for a loan. If possible, avoid disputing any credit accounts other than for theft or fraud reasons. If you do want to dispute information to increase your credit score, make sure you do it at least 6 months prior to applying for a loan. Give yourself enough time to correct the error and get the negative information completely removed from your credit reports before you start applying for a mortgage or some other loan. This way you will have a great credit score and you can go into the transaction knowing your credit is squeaky clean.