When you apply for a mortgage, the lender pulls your credit reports and scores from the major credit bureaus. Those reports shape whether you are approved, which loan programs you can use and the pricing you are offered. Because a report is only as accurate as the information companies send to the bureaus, it pays to review your own reports well before you apply and to correct anything that is wrong.
Why accuracy matters more for a mortgage
A mortgage is usually the largest loan most people take on, and underwriting is detailed. An account that is not yours, a late payment that was actually on time, or a debt that shows as open after you paid it off can lower your score or raise your debt-to-income ratio on paper. Fixing a mistake can take weeks, so finding it before you start house hunting gives you time to resolve it without delaying a closing.
Where to get your reports
Federal law gives you the right to free copies of your credit reports. The official site for requesting them is AnnualCreditReport.com, which is run on behalf of the three nationwide bureaus: Equifax, Experian and TransUnion. Request all three, because lenders may look at more than one and the reports do not always match. Be cautious with look-alike websites that ask for payment or push subscriptions.
Common errors to look for
- Identity details: misspelled names, wrong addresses or Social Security number variations that could mean another person's file has been mixed with yours.
- Accounts you do not recognize: these can be reporting mistakes or a sign of identity theft.
- Incorrect payment status: payments marked late when you paid on time, or a single late payment reported more than once.
- Wrong balances or limits: an outdated balance or a missing credit limit can make your utilization look higher than it is.
- Closed or paid accounts shown as open or unpaid: including collection accounts that were settled.
- Duplicate debts: the same debt listed by the original creditor and a collector as if they were two separate balances.
- Outdated negative items: most negative information can only be reported for a limited period set by law.
How to dispute an error
1. Gather your evidence
Collect bank statements, payment confirmations, payoff letters or account closure letters that show the correct information. Keep copies of everything you send.
2. Dispute with each bureau that shows the error
You can file disputes online, by mail or by phone with the bureau that lists the mistake. Explain clearly what is wrong, what it should say and attach supporting documents. The Consumer Financial Protection Bureau (CFPB) publishes sample dispute letters on consumerfinance.gov. The bureau must generally investigate and forward your dispute to the company that supplied the information.
3. Contact the company that reported it
You can also dispute directly with the lender, card issuer or collector that furnished the information. If the furnisher agrees it was wrong, ask it to correct the record with every bureau it reports to.
4. Check the results
The bureau will send you the outcome. If the item is corrected or deleted, request an updated copy of your report to confirm. If the dispute is rejected and you still believe the information is wrong, you can add a brief statement to your file, submit new evidence, or file a complaint with the CFPB.
Timing your disputes around a mortgage application
Ideally, review your reports several months before you plan to apply. Disputes that are still open when a lender pulls your credit can complicate underwriting, and some loan programs ask that disputed accounts be resolved or explained before approval. If you are already working with a lender, tell your loan officer about any dispute so it can be handled correctly. Some lenders can request a faster update to your credit file once a correction is confirmed, but that service depends on the lender.
What disputes cannot do
The dispute process is for information that is inaccurate or incomplete. Accurate negative information, such as a late payment that really happened, generally stays on your report for the period allowed by law. Be wary of companies that promise to remove accurate negative items for a fee; the Federal Trade Commission warns consumers about credit repair scams. Paying bills on time and keeping balances low remain the reliable ways to strengthen a credit profile.
Key takeaways
- Pull all three credit reports from AnnualCreditReport.com well before you apply for a mortgage.
- Look for identity mix-ups, unfamiliar accounts, wrong payment history, outdated balances and duplicates.
- Dispute in writing with evidence, both with the bureau and the company that reported the error.
- Keep your loan officer informed if a dispute is open during the application.
This article is general information, not legal, tax or lending advice. Loan requirements differ between lenders and change over time, so confirm the details with your lender, the relevant agency or a licensed professional.