Disputing credit line issues to boost your score can actually hurt your mortgage application. The speaker explains how this backfires with lenders and credit bureaus, and why it matters differently depending on your loan type.
Thinking of disputing a credit line to boost your credit score to prepare for a whole loan that actually might do more harm than help. Here's how disputes work. You have a creditor saying it was a missed payment on a credit line, and the consumer disagree and say, I'm going to fight that. I file a dispute. The credit bureaus who referee that side temporarily in the favor of the consumer say, okay, we'll cover up that misspayment while you guys sort this all out. With it being temporarily covered up, it kind of artificially boost the credit score, which looks good on paper, but the mortgage world is trained to look for disputes. And if it's a conventional loan, Fannie Mae and Freddie Mac, they put that into their algorithm. And if they will approve that loan when you run it through their computer system. And having disputes weakens the approval odds. If it's an FHA loan, they automatically require any disputes on negative lot trade lines over $1,000 have to be removed. So you reveal the real credit score. So by doing the dispute, you might actually kind of muddy up the process, reach out. We have a lot of and tricks on how to really boost your credit score.
