Credit Report Dispute - Mortgage Related

I could sit here and cry. I'm sorry if this comes as very long winded.

DH & I have gotten pre-qualified for a mortgage, but not yet pre-approved (figuring out how much we'll put down, etc.). In the next few months we were hoping to get pre-approved and really undergo finding a home!

DH's credit has always been IMMACULATE his entire life...until....the month before we want to apply for a mortgage

DH sent in a form to his student loan servicing company to set up auto payments (why he can't do this online, is beyond me) about 2 months ago. Fast forward to today....he goes on the website to see what his payoff amount is on the loan and notices its past due. He calls the company (AES) and they tell him he is 2 months behind and never received his request for auto pay. DH checks his credit...and they reported him 60 days late

He has never in his 35 years of living had anything reflect his credit negatively...

Is this worth a dispute? It dropped his credit score. Does anyone have any experience disputing?

Are we done? I feel like we aren't going to get approved for a mortgage now and the house I have my eye on and just dropped $50g is out the window

On a side note. DH makes a very decent salary and his debt is minimal, just this student loan which is down to about $3g and 1 car loan. That's it.

Thanks if you read this far or if you have input!

Credit Report Dispute - Mortgage Related

I don't think a hit like that will have a major affect on your credit. I would dispute especially if you have a copy of the letter he sent

Re: Credit Report Dispute - Mortgage Related

Unless his credit was borderline to qualify to start with (and it doesn't sound like it was), I don't think one 2 month delinquency should impact his score enough to impact your mortgage qualifications. Your FICO score, which is what lenders use (slightly different than a credit score in that it looks back 7 years not just 2 years) is impacted by a lot of different factors, not just payment history and latenesses. They look at things like the length of your credit history, what percentage of your credit has been utilized, etc.

If you plan to get an FHA loan, the credit score requirements are less strict than the requirements to qualify for a conventional loan.

Also, your FICO score is fluid and changes all the time, so if your dh corrects the misunderstanding and pays on time going forward, the score should go back up. (Assuming you still want to wait a few months to buy.)

But I would recommend getting a full preapproval now if you are looking at houses. It's good to have it for your own peace of mind, and you can always update it as needed (if you don't find something in the next month or so).

Credit Report Dispute - Mortgage Related

I had a few little blips on my credit report and the bank just asked for a written explanation. I would think your husband could let the bank know what happened (thought he was on automatic payment plan) and the bank would take that into consideration. I don't think this will have any major impact on your ability to get pre-approved and to qualify for a mortgage.

Re: Credit Report Dispute - Mortgage Related

Your DH should call the loan company, explain the situation and ask them if they will remove the lates and report that to the credit agency.

Unless his score dropped LOW (under 640), he should be okay.

Do not keep checking the score..it can cause it to go down even more.

The lender will most likley ask for a letter of explanation for the lates.

I would definitely disclose this to whomeever you are working with on a pre-approval.

Credit Report Dispute - Mortgage Related

I really don't think a 2-month delinquency will affect you that much. If that was the case, I don't think most people would be approved for a mortgage!

I don't know if it's worth disputing - it's a legitimate issue. DH should have realized that the auto-pay never went through the first month and realized something was up.

Re: Credit Report Dispute - Mortgage Related

Thanks for everyone's input!

His credit score (we have the credit monitoring through equifax) dropped significantly...I can't believe it. It dropped about 70 points.

He called the company (AES) and they are completely not helping him. He told them to look back on his history, told them he is trying to buy a house, etc., they didn't seem to really care. He is going to call back tomorrow after he cools off a little.

He realizes he should have been more careful checking over his bank statements (heck, I could have done it too)...and that is our fault. His loan payments are $110 a month....I wouldn't notice that not being taken out unless I really look and it frustrates me that this is happening for $220!!!

Live and learn, I guess! Hopefully we can get on with this process and pay off this stupid loan!

Re: Credit Report Dispute - Mortgage Related

We had an issue with a $20 macy's bill that never got sent to me. Macy's wrote a letter saying it was an error and it fixed my credit score. It did however slow things down a bit because the underwriter had to look into it a little bit.

I would try again with student loan company Good luck

Message edited 7/19/2012 9:29:45 PM.