How A Credit Dispute Can Affect Your Chances Of Getting A Mortgage

In today’s day and age it is very important to own a home, but is there a possibility you can be denied home ownership before you even begin?  The answer is yes.

While we have been taught to dispute any inaccuracies in our credit report and do what it takes to protect and correct our credit, this can bite us in the butt while trying to secure a mortgage.

Most people will ask, “How can this be?” The truth is that now more so than ever lenders are using any means necessary to eliminate a potential homeowner from the lending process.

In a world that is consumed with debt, as a majority of Americans are constantly fixing their credit, especially when it is time to buy a house or any other considerable purchase this can create an unexpected problem.

The reason why you or I may be eliminated from the lending process is due to a process of verification that most large lenders such as Fannie Mae and Freddie Mac use.  During this process they look for any blemishes that stand out along with the state of your current credit.

They do this by viewing and analyzing both your credit score and credit reports.  At the time of review, in most cases if you have any open disputes you may have difficulty no matter how good your credit may be and if your credit is less than great you can expect to be flat out denied immediately.

This can be avoided by taking a few precautions. First, verify that there are no open disputes by checking your credit report.  Do not take a creditor or any other credit reporting entity for their word, while you may have agreed to terms, if it is not reported at the time you are seeking a mortgage, to the lender you still have an open dispute.

Next, if you are in a hurry to get your mortgage process underway and you have decent to great credit, it may be in your best interest to hold off on the dispute until you get the ball rolling on the home owning process.

For those with not so great credit, it is better to be honest with a potential lender, as they should have a general feel for the process and should be able to tell you upfront if an open dispute will be a red flag and keep you from home ownership before you begin the long application process.

This does not necessarily mean you should not pursue lending, but it is far better to be aware and have a read on the potential outcome of your loan application process before starting.

Finally, I cannot reiterate it enough: Always keep an eye on your credit and take care of any disputes as soon as possible.  Also, stay aware and continue working towards a higher credit score and a blemish free credit report.  Work towards securing financial freedom and staying there.

My Credit Repair Tips