I Was Turned Down for a Mortgage Because of an Error on My Credit Reports - How Can I Fix This?

I Was Turned Down for a Mortgage Because of an Error on My Credit Reports - How Can I Fix This?

We understand how traumatic this can be. Not only is it humiliating but it can have serious economic effects on you for years to come if you don't get the mortgage you applied for or get a higher rate than you deserve.

This first step is to get a copy of the credit reports that your mortgage company or mortgage broker used to evaluate your application. Normally this is a “tri-merge” report where all three of the credit reporting agencies (Equifax, Experian, and Trans Union) have their report on one document. Sometimes your broker will give this to you and sometimes they will claim they can't. It doesn't hurt to ask. If you can't get your report from your broker, then you need to pull your credit report as described here. In fact, even if you can get your report from your broker, we still recommend that you pull your three reports for free just to verify what was in the report relied on my the bank or mortgage broker.

The second step is to figure out what errors are on your reports. You need to carefully review every page of the report or reports and make a note of anything that you think is wrong. This includes your personal information (names, addresses, social security, employment), your accounts or “trade lines” (do you recognize all names, are balances right, are the history records right), and the inquiries (are there any on there that you did not make - please note we are only talking about the ones that affect your score known as hard pulls).

If you determine anything is wrong, then you need to dispute the incorrect information with the credit reporting agency that has the wrong information. Often it will be at least two if not three that will have the wrong information. If it concerns an account or inquiry, then you should consider also sending a copy of the dispute letter to the creditor or furnisher who provided the wrong information or pulled your credit. Click here for a sample letter and here for a general overview of the dispute process.

Once you have the results of your investigation back from the credit reporting agency or agencies, if the incorrect information is corrected, you can show that to your mortgage person or broker and see if that will get the loan you wanted.

If, however, the credit reporting agencies or the furnishers of the information refuse to correct the false information, then you will likely have to sue in order to make them report the information correctly. If you would like us to help you at any stage, please do not hesitate to contact us.