Can you get a mortgage with disputes on your credit report? What to know.

Don’t Dispute Items on Your Credit Report Before Getting a Mortgage. Here’s Why

Disputing items on your credit report can derail your mortgage approval.

The reason: your mortgage lender removes disputed accounts from its analysis, rendering any approval inaccurate and unusable.

So lenders will simply set the file aside until all credit disputes are settled or removed. This can delay your home shopping or put your earnest money at risk if you’ve already made an offer.

Here’s how to avoid disputed credit accounts or handle ones that are already on your report.

Start your mortgage approval. We’ll guide you through credit issues.

Mortgage rules about disputed credit items

There’s a growing trend to dispute anything and everything on a credit report to see if the bureau will remove negative information. Credit repair agencies use this tactic as well, putting their clients’ mortgage approval at risk.

In most cases, open disputes on account balances totaling more than $1,000 will kill or significantly delay your application. 

The various loan types view disputes differently, but disputes rarely help you get a mortgage.

Conventional loans

Fannie Mae and Freddie Mac use algorithms to approve a loan. These systems will at first try to include disputed items. 

If the file can’t be approved with the accounts, the system may issue an approval excluding disputed items. It will issue a warning that the lender must verify the accuracy of the dispute.

Most lenders don’t want to be “on the hook” for verifying credit information. They will simply request that you resolve or remove the disputes.

Medical debt disputes will be disregarded and won’t affect your approval.

Get started on your conventional loan.


FHA leaves it to the lender to decide whether to include disputed accounts in the credit review. Again, expect the lender to put the file on hold for disputed accounts totaling more than $1,000. 

The lender may choose to “manually underwrite” the file. This is when a human underwriter examines creditworthiness instead of the computer algorithm. Not all lenders manually underwrite, though. The best-case scenario here is that your file is significantly delayed.

With FHA, the following disputes will be disregarded:

  • Medical accounts
  • Accounts with zero balances
  • Accounts with aggregate total balances less than $1,000

VA loans

Like FHA, VA loans may be “downgraded” to a manual underwrite if there are any non-medical disputes.

Be prepared to supply documentation for any disputed accounts, such as a police report in the case of fraud.

USDA loans

A disputed account will result in a downgrade to manual underwriting unless:

  1. The account has a zero balance or indicates “paid in full” or “paid as agreed”
  2. The derogatory information is more than 24 months old
  3. The actual payment or 5% of the account balance is included in the debt-to-income ratio

See if you’re eligible for a USDA home loan.

If you’re thinking about disputing items

Unless it’s a medical debt or true fraud, you should postpone your dispute until after your mortgage is complete (not just approved – fully closed and funded).

Try applying for the loan even with inaccurate accounts. There’s a chance you can be approved with them. Then you can dispute them after the loan closes.

However, you may need to dispute an item like an erroneous $500 payment that keeps you from qualifying.

In this case, you may still want to apply and have the lender tell you to dispute the item. Only do so if you have documentation. Wait until the item is removed from your credit report. Then have the lender pull a fresh credit report that hopefully does not show the erroneous account or dispute status.

One thing to never do: dispute negative but accurate items on your credit hoping the bureau will remove it.

Accounts that are OK to dispute:

  • Medical collections
  • Accounts with zero balance
  • Combined account balances of less than $1,000 if getting an FHA loan

Do not dispute these accounts (when applying for a mortgage)

  • Any account that reflects accurate information
  • Inaccurate accounts including
    • Collections (non-medical)
    • Judgments
    • Late payments
    • Charge-offs
    • Tax liens

It’s tempting to dispute inaccuracies on your credit report, but it could do more harm than good when you need a mortgage.

Let us guide you through credit issues for your best chance at approval.

If you already have disputed items on credit

As mentioned, disputed items are often removed from your credit report and computerized mortgage analysis. Items in dispute can render your approval unusable. 

However, the lender may be able to approve the loan even with disputed items.

As mentioned, conventional loan algorithms will attempt to approve the loan including disputed debts. FHA loans won’t consider total disputed balances under $1,000.

If you won’t be approved with the disputes, it’s time to start thinking about strategically removing them from your credit report.

Should you remove a dispute?

It’s not a good idea to remove every dispute on your credit report. As mentioned, you may be approvable with disputes. 

When you remove a dispute:

Your credit score might drop: Bureaus often don’t consider disputed accounts in credit scoring models. Adding them back can reduce your credit score.

Your loan might become “unapproved”: Removing a dispute can drop your score below eligible levels (for instance, 580 for FHA). It could also increase loan costs since credit scores influence mortgage rates and fees.

That’s why you may want to apply with a lender before removing disputes. Only remove disputes that prevent you from getting approved.

You may also want to get advice from a credit expert on the potential impact of removing disputes.

Do not remove disputes on:

  • Medical debt
  • Collections with zero balances
  • Accounts with very small balances

In some cases, you may be able to switch from a conventional loan to FHA without removing disputes on credit.

How to remove disputes

According to Credit Security Group, the following is the best way to remove disputes.

Your first step is to get a free credit report from each bureau (Equifax, Experian, and TransUnion) at This is the only truly free, government-sponsored way to access your report.

With this information:

  1. Look for the word “dispute” on each tradeline on each report. You will have three separate credit reports, one from each bureau
  2. Call the creditor first and remove the dispute
  3. Call each bureau that is reporting a dispute
  4. Speak to a representative and say you “no longer dispute the account and agree with the balance and prior paying history” according to Credit Security Group

For each step, take notes on who you talked to and when. Call back in a few days to ensure the dispute was removed.

When all required disputes are removed, ask your lender to pull a fresh credit report. If disputes are cleared, you are good to go. If not, repeat the above steps until all deal-killer disputes are removed.

Again, only remove disputes if you’re sure they are stopping you from getting approved. And, be prepared for your credit score to drop, your loan to be “unapproved”, or other repercussions when you remove a dispute. 

Am I agreeing to pay the account if I remove the dispute?

You will have to state to the creditor, debt collector, or bureau that you “no longer dispute the account and agree with the balance and prior paying history,” according to Credit Security Group.

This feels scary, especially if it’s a fraudulent account.

While you are allowed to dispute the account again, you shouldn’t remove a dispute on a fraudulent account.

Ali Zane, Credit Restoration Coach at Imax Credit, says, “You do not want to remove a dispute if the account is truly fraudulent. Afterwards, the creditor will use that against a consumer.”

Remove any fraudulent accounts from your credit report through the dispute process before applying for a mortgage.

Credit disputes: a very complex issue when it comes to mortgage

This is one of the most complex issues with mortgage approval. On one hand, you want your credit report to be accurate. On the other hand, you could tank your mortgage approval by making it so.

The bottom line is to avoid opening new disputes until you apply. If you have disputes already, apply and see where you stand.

If the lender tells you to simply remove all disputes, get another opinion, because this may not be good advice.

Get started on your home purchase or refinance. We’ll help you tackle credit issues.


  • Tim Lucas

    Tim Lucas (NMLS 118763) has 20 years of hands-on mortgage industry experience helping everyone from first-time buyers to experienced investors. He purchased his first home at 26 with just $1,100 out-of-pocket and now owns real estate worth $2.4 million. Tim was the managing editor at national websites and and has been featured in publications such as Time, U.S. News, MSN, and more. He is a licensed loan originator (NMLS 118763). Connect with Tim on LinkedIn, Twitter, and TikTok.