Disputed Tradelines

If the borrower has disputed information in their credit file, and the credit reporting company confirms that the disputed information is incorrect or incomplete and underwriting the loan needs to be completed before the credit files can be corrected, the underwriter cannot use the credit score(s) when underwriting the loan. Instead, the credit risk assessment must be based on a review of the borrower’s traditional credit history.

If there are multiple disputed tradelines or a dispute on a mortgage tradeline, the underwriter should obtain correspondence directly from the borrower indicating the reason for the dispute. The aspect of the tradeline–such as balance and payment history–that is being disputed is of particular interest when considering the impact to the borrower’s overall credit profile.

The underwriter is responsible for determining whether the borrower’s explanation is reasonable and/or whether additional documentation (such as canceled checks) is necessary to disprove the adverse information. Lenders are not required to investigate disputed medical tradelines.