Why You Shouldn’t Dispute Credit Report Items Before Applying for a Mortgage in Idaho

When preparing to buy a home in Idaho, ensuring your credit report is accurate is crucial. However, disputing items on your credit report right before or during the mortgage application process can inadvertently delay or derail your loan approval.

The Impact of Disputes on Mortgage Approvals

Disputing an item on your credit report flags it as “in dispute,” leading mortgage lenders to exclude that account from their analysis. This exclusion can result in:

• Delays: Lenders may pause the application process until disputes are resolved.

• Denials: Incomplete credit profiles can lead to loan denials.

• Manual Underwriting: Some loans may require manual review, which is time-consuming and not always available.

How Different Loan Types Handle Disputes

• Conventional Loans (Fannie Mae & Freddie Mac): Automated systems may issue warnings for disputed accounts, prompting lenders to require dispute resolutions.

• FHA Loans: Disputed accounts over $1,000 can lead to manual underwriting. Exceptions include medical debts, zero-balance accounts, and disputes under $1,000.

• VA Loans: Non-medical disputes can necessitate manual underwriting and additional documentation.

Best Practices Before Applying for a Mortgage

• Avoid New Disputes: Unless it’s a case of fraud or a significant error, postpone disputes until after your mortgage closes.

• Consult Your Lender: Discuss any potential disputes with your mortgage broker to understand their impact.

• Monitor Your Credit: Regularly check your credit reports for accuracy well before starting the homebuying process.

Need Guidance on Navigating Credit Reports and Mortgage Applications?

I’m here to help Idaho residents understand the intricacies of credit reports and secure the best mortgage options available.

Jesse Stroup | Mortgage Broker
Call me at 208-907-2846 or fill out the form to get in contact

Home Loans of Idaho, LLC
NMLS ID 6229 | 2187314
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