If your mortgage application was denied due to errors in your credit report, you have legal options to correct the mistakes and potentially secure approval. Credit reporting mistakes, such as outdated information or incorrect accounts, can negatively impact your credit score and mortgage eligibility. In this article, we outline the steps you can take to address credit report errors and protect your consumer rights.
If a mortgage application is denied because of credit report mistakes, the first step is to dispute the errors with the credit bureaus and provide evidence for correction. Once fixed, the lender can reconsider the application. If the errors are not resolved, consumers may file a complaint with the CFPB or pursue legal action under the FCRA.
What Are Credit Report Mistakes?
Credit report mistakes are inaccuracies or outdated information on your credit file that can affect your credit score. Common errors include:
- Incorrect accounts or loans
- Outdated payment histories
- Fraudulent accounts
- Mistakenly marked delinquent payments
These errors can lead to a lower credit score and result in mortgage denial. The Fair Credit Reporting Act (FCRA) ensures consumers can dispute inaccuracies, but errors often require prompt action to be corrected.
How to Dispute Credit Report Errors
If you believe a credit report mistake led to your mortgage denial, the first step is to dispute the error. Here’s how:
- Obtain Your Credit Report: Request your credit report from the three major credit bureaus—Equifax, Experian, and TransUnion. You’re entitled to one free report per year.
- Identify the Errors: Review the report carefully for discrepancies such as accounts that don’t belong to you or incorrect payment histories.
- File a Dispute: Contact the credit reporting agencies directly to file a dispute. They are required by law to investigate and resolve the issue within 30 days.
It’s important to provide supporting documentation, such as bank statements or proof of payments, to help resolve the dispute. After the investigation, you’ll receive an updated credit report.
How to Get Your Mortgage Reconsidered After a Dispute
Once a credit report error is corrected, you can contact your mortgage lender to request a reconsideration of your application. Lenders may review your case again, especially if the error was a key factor in the original denial. If the error has been corrected, ask your lender to consider the updated credit report and re-evaluate your mortgage application.
What to Do If the Error Is Not Corrected
If the credit reporting agency fails to correct the error after you’ve disputed it, you may need to take further action. The following options are available:
- File a Complaint with the Consumer Financial Protection Bureau (CFPB): The CFPB can investigate disputes between consumers and credit bureaus.
- Seek Legal Representation: If the dispute isn’t resolved, hiring a consumer protection attorney can help. Legal experts, like Justice Consumer Law, specialize in credit report errors and can help you pursue legal action under the Fair Credit Reporting Act (FCRA).
Under the FCRA, you may also be able to seek damages if the incorrect credit information caused harm, such as a mortgage denial.
How Long Do I Have to Dispute an Error?
You must dispute any inaccuracies on your credit report within 30 days of identifying them. The credit reporting agency is legally required to investigate your dispute within that time frame. Failure to act within 30 days can delay the correction process and may result in further complications, such as continued mortgage denial.
Can I Sue for Damages if I Was Denied a Mortgage Due to Credit Report Mistakes?
Yes, under the FCRA, you can sue for damages if a credit reporting agency refuses to correct an error or if the error caused financial harm, such as a mortgage denial. Damages can include both actual and punitive damages, as well as attorney fees in some cases.
At Justice Consumer Law, we specialize in helping consumers fight back against credit report errors. Our attorneys can assist with disputes and represent clients in legal proceedings, ensuring you are treated fairly.
Conclusion
If your mortgage was denied due to errors on your credit report, taking prompt action is essential. By disputing errors, communicating with your lender, and seeking legal advice when necessary, you can correct inaccuracies and potentially secure mortgage approval. For legal assistance, contact Justice Consumer Law, where we specialize in protecting consumers’ rights related to credit report mistakes.
FAQs
What are the most common credit report mistakes?
Common mistakes include fraudulent accounts, incorrect payment histories, and outdated information. These errors can negatively impact your credit score and mortgage eligibility.
How long does it take for a credit report dispute to be resolved?
Credit bureaus are required to investigate disputes within 30 days of receiving a claim.
Can a mortgage lender reconsider a decision after correcting a credit report mistake?
Yes, once the error is corrected, you can ask your lender to reconsider your mortgage application based on the updated report.
Can I sue if I was denied a mortgage due to credit report mistakes?
Yes, under the FCRA, you can sue for damages if incorrect information on your credit report caused harm, such as a mortgage denial.