Handling Accounts That Are Shown as Disputed on the Credit Report

When an account on a credit report has a dispute remark on it, an automated underwriting system (AUS) will pick up that remark and show it as a “refer” or an “ineligible”. Per Fannie Mae guidelines, the remark must be removed at the bureau level in order to run the report through the AUS. If a trade line update is done to remove the dispute, it would only be a cosmetic fix and will not be picked up by an AUS, still resulting in a refer. The only way to have a remark removed at the bureau level is through the rescore process. Below is what is required by the bureaus to have the remark removed.

Experian and Trans Union: will accept a letter from the borrower that is typed, signed, dated, references the account name and number as it appears on the credit report that only says “I am not disputing this account. Please remove the dispute remark.” If the file is a joint file and the dispute remark is shown for both borrowers, the letter will have to be signed by both borrowers. The letter should contain only these two sentences. If the letter has long explanations, etc. the bureaus will normally reject the letter. Very rarely do either of these bureaus come back to us and ask for a letter from the creditor as well. 99% of the time a letter from the borrower will suffice. It is important to note that the letter from the borrower must be typed and not hand written.

Equifax: will also accept a letter from the borrower with the same verbiage use for Trans Union and Experian. However, if the remark on Equifax reads “reinvestigation in progress” we cannot do a rescore to have it removed. If this is the case the borrower needs to call the Office of Consumer Affairs at Equifax. They need to ask for a supervisor, tell them they want to withdraw the dispute and have the remark removed. Normally they will do this immediately. The phone number to call is 800-203-7843.

IMPORTANT! If you are looking at a credit report with a dispute remark for a client, always look at the raw data as each bureau could be reporting the dispute remark differently. One bureau may be reporting the dispute while the others may not. This is especially important for joint accts to see if the dispute is reporting on both borrowers. The raw data can be seen on the web view of the report by clicking on the blue XP/TU/EF at the end of each creditor line on the report.