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Paul Yamilkoski

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Lenders, You Can Avoid the Blight of “Dispute” Comments

I read a piece by Pamela Marron the other day, where she drew some attention to the importance of being aware of “disputes” on credit reports and automated underwriting findings. The article presented some good information. Her examples cast a light on the problems that can be created when consumers and credit repair companies dispute information on the credit report.

The light she shines in this article exposes what happens when the dispute process is improperly handled, either out of ignorance, as is the case for most consumers, or malpractice, as is the case with many but not all credit repair companies and credit repair type services.

I have dealt with many consumers that think that just sending a “dispute” to the credit bureaus will solve all their problems and that nothing else needs to be done. That is understandable. In an ideal world if a potential problem were noted, the response would be for all parties involved to be diligent in correcting the error. The reality is that creditors and the bureaus seldom demonstrate that type of diligence.

I am not accusing them. Let’s face it, many consumers dispute a negative account, even when they know there is nothing inaccurate, thinking that by disputing the account it has to be removed and they won’t be accountable for it any longer and won’t have to pay it. When enough of those types of circumstances occur, companies and the bureaus naturally will not assume all disputes to be valid and won’t want to waste time and money to be so diligent. So the issue goes both ways and is unfortunately a nasty circular cycle.

In the process of helping clients, I have seen the result of the efforts of many other credit repair companies, most were terrible. There are definitely reputable companies out there, like Heartland Credit Restoration. But there are a bunch that are just trying to make a quick buck and either don’t really know their business and the right way to do things, are more interested in cutting corners to make more money and make it fast, or both.

A number of yeas ago, one of the common tactics to quickly get someone’s credit score to qualify for a loan and get the deal done right away, was to throw everything negative into dispute and then pull credit shortly after.

You see, when accounts are actively in dispute they are removed from the scoring, for the most part, and scores jump up, making the client look more qualified than they really are. Once those investigations are completed, the accounts are included in the scoring again and the score drops.

But for those lenders and credit repair companies, it didn’t matter because the loan was already done and they had already been paid.

This is one of the reasons the government changed the law in 2009 relating to “dispute” comments on credit reports. They wanted to eliminate that practice from being an issue creating bad loans.

Many bad credit repair companies continue this practice, and don’t really focus on really repairing credit. They just dispute, as if doing something meaningful,  advertising how they improve scores in 30 days, get paid and move on.  As an old farmer once told me, they put lipstick on a pig, call it a princess, get paid and run, leaving the consumer and lenders to try to clean up the mess.

I have to emphasize that not all credit repair companies are crooked or incompetent. There are definitely a number of reputable companies, companies like Heartland Credit Restoration, that do it right and focus on actual credit restoration and not simple score changing. Among other things, a good company will always offer, as an included part of their service, “dispute” comment removal.

Avoid, at all cost, any company that doesn’t remove “dispute” comments. All they will have done is artificially improve your scores. Your credit won’t be repaired and it won’t be usable by lenders. You will see accounts reappear on your report, scores drop and lenders still saying “no” to your applications for a loan, and you will wonder what you paid the company for. Save yourself the time money and frustration.

“Dispute” comments are a big deal, especially in the process of qualifying for a mortgage . It is important for both consumers and lenders to be aware of them. Handling them improperly will result in headaches, heartaches, lost time and money. Make sure you get them addressed properly. You will be glad you did.       images

If you, or someone you know,  has run into credit problems and could use a little credit help, a reputable credit restoration company like Heartland Credit Restoration is a great place to start. You will reach your credit goals much faster and safer with the help of a professional, and you will have loan ready credit.

Call me for a free consultation to see how we might be able to help. 319-533-5236.

If you are a lender or realtor that has a client you might have to turn away due to credit problems, then let me see if Heartland Credit Restoration can help change that client into a approved client with loan ready credit.

You should never have to say “NO” to a client. We can help change those into a “YES”.

Call me for a free consultation. 319-533-5236.

Don’t forget to let me know what you think I always welcome comments. And please do me a favor and share this with your contacts on social media.

I’m looking forward to helping you.

Until then, I hope you have a wonderfully blessed day!

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