@Anonymous wrote:So, on a different thread two underwriters answered this question about disputes. The dispute does not increase/decrease your score. It's the automatic underwriter that gives the lender the note that the account was ignored when calculating credit risk. So the AU didn't account for that tradeline in the risk. And if there is something owed, then the UW has to account for that in the DTI.
So, the answer from both UW's in that other thread was that if there is $0 owed (or 3 other things I can't remember) or the account said "Consumer Dispute. Dispute Settled" then you don't have to get it removed. Wait for your UW to ask for it to be removed. My LO also told me mine might have to be removed (I have 6 of them). But all of them say Dispute settled so he's waiting to see what UW says before asking me to remove them.
Where? An active dispute can definitely muck up FICO's algorithm (and change score) as it can entirely discount the tradeline from scoring for some cases.
Individual lenders can do what they want (with third party mandates for things like conventional mortgages), but to state disputes don't have an effect on score is simply incorrect.
@Anonymous wrote:Hmmmm, I thought I read that it only mattered in the DU. Let me see if I can find that thread. It's a good one!
Dispute comments / remarks only matter for DU but that's because it can't distinguish between an active dispute and a dispute comment.
An active dispute though is a no-fly zone generally though maybe that got relaxed?
@OP: As Bamaguy rightly suggests, get the lender to modify it... and if they won't, forgo the appraisal fee and start over with another lender, but it really shouldn't come to that as current lender knows you can make it work with someone else if needed, or at least after you remind them of that fact. Fact is your old score and new score are worlds different when it comes to mortgage qualification.
