Process for Disputing Errors on Credit Reports

There are a few important factors that dictate whether you qualify for a given mortgage and the mortgage rates you can receive, and one of the top such factors is your credit. Your credit score and credit report are areas every lender will look at when evaluating you as a potential borrower, speaking to your financial and credit history.

At Altius Mortgage and our partners at Mortgage Ogden, we’re here to help with all credit-related elements of a mortgage, helping you obtain the best mortgage rates for your credit range whether you’re a first-time homebuyer or a seasoned veteran. And while the agencies in charge of credit scores and credit reports are generally accurate and detailed, it’s possible for errors to occur somewhere during this process – here are some basics on this realm, plus what to do if you believe an error on your report is damaging your ability to take out a loan.

How Credit Score Works

Your credit score is a single number that represents your credit rating and quality as assessed by three major credit bureaus: Experian, TransUnion and Equifax. Things like on-time payments, greater-than-minimum payments and general responsibility with your credit cards, loans and lines of credit will raise your credit score, while behaviors on the flip side of this coin will lower it.

This number is not the only factor in applying for a loan, but it’s generally a big one. It helps lenders quickly determine how creditworthy you are based on your history and current finances.

Credit Report and Inquiries

So how do you learn your credit score? One way is through obtaining a credit report, which will show both “soft” and “hard” inquiry information. These are defined as follows:

  • Soft inquiry: Times you request your own credit report, or when a lender checks your report to see if you can be pre-approved.
  • Hard inquiry: Only take place when you apply for credit – such applications will remain on your report for two years and can impact your score.

Disputing Credit Report Errors

When applying for a mortgage loan or any other major loan type, you should check all three of the bureaus listed above for errors. Here are some basics on what to do if you find errors with any of them:

  • Equifax: If you find an error, first contact Equifax by phone or mail to file a dispute claim. If the dispute is legitimate and provable, your score may be raised immediately. In other cases, a longer investigation will take place.
  • Experian: Experian has online forms to fill out for a disputed claim, plus trackers that allow you to follow your claim through the system.
  • TransUnion: TransUnion also uses online dispute forms, first requiring you to create an account.

For more on disputing an error on your credit report, or to learn about any of our home loan services, speak to the staff at Altius Mortgage today.

How Your Tax Returns Impact Your Mortgage Application

For a number of reasons, from legal compliance to a proper financial picture, it’s important to be accurate and detailed on your tax returns each year. Did you realize, though, that this theme can actually play a big role in a future mortgage application and approval through a lender?

At Altius Mortgage and our partners at Mortgage Ogden, we’ll help you understand the application requirements for any of our home mortgage loans, including the role your tax returns play. Tax returns are a top verification tool used by lenders to confirm that you make enough money to handle the mortgage payments you’re applying for – let’s go over some important areas to consider, plus the elements your lender will be looking to obtain during your application.

Basic Income and Interests

For those who work basic hourly or salaries job positions with no other income, tax returns are generally a breeze. You report your yearly income on your W-2, then adjust basics like withholding tax and others to determine whether you get a refund based on the taxes you paid during the year. You should also track allowed deductions, which may lower your taxable income.

In addition, include the amount of interest you’ve earned on any savings, stocks or certificates of deposit. These gains count as basic income on a tax return.

Stock Shares

In some employment situations, employees earn a portion of their income through stocks as part of a profit-sharing agreement. In these cases, this information must also be included on your return, as many lenders will count it as part of your income.

Rental Income

If you own other properties where you are acting as the landlord and collecting rental income, you will need to fill out a Schedule E form for your tax return. The rental payment you receive will go toward the mortgage, property taxes, insurance and other costs, so you’ll be able to list the amount that’s actually making its way to you as income.

Self-Employment

Finally, if you’re self-employed, you have to pay close attention to expenses, deductions, appreciation, accounts payable and several other potential factors to determine your final income figure. Some lenders will ask for a profit and loss statement if tracking your income in traditional manners proves too difficult.

Important Lender Information

Some of the primary tax return elements your mortgage lender will ask for during the application process include:

  • At least one year, and usually two, of recent tax returns
  • Multiple years of recent W-2 or 1099 forms
  • Multiple years of business tax returns if you own at least 25% of any business

For more on the role tax returns play in your mortgage application, or to learn about any of our mortgage loan services, speak to the staff at Altius Mortgage today.