I recently got a "pre-approval" pending a few things: I had to submit my bank statemets and remove the "dispute" tag from an item that was in collections. The item is from an old ER visit when I was sick and unemployed (bad combination). I called the collections company that had purchased my debt and they first told me that they would remove the "disputed" tag once I gave them a down payment and started making payments. I found out this was not right so I called them back today (the 30th day) and asked why he didn't remove the "disputed" tag. He said that it was verified and it would be re-reported as delinquent. Is this going to hurt my score? It was already showing up there so I'm not sure how it could make my score any worse. Before my Experian was 587 and it just jumped up earlier this week to 627 and I'm not even too sure why. At the time it was pulled my scores were Equifax= 668, TU=640, EXP=587. My Experian was at 627 but I accidentally missed a student loan payment (I went to pay it online and thought it went through but apparently it didnt and I got a 30 day late).
My concern is this: will it hurt my score when they remove the "disputed" and refresh the delinquent claim? It's already on my Experian so I don't know how it could make it worse. I'm just really worried about losing my loan, while we were looking at some of the new homes a few of them already had "sold" signs and the realtor told me that they had already been sold but the loan fell through at the last minute so they are back on the market. I don't want to be one of those horror stories. Any advice is appreciated 
@Anonymous wrote:Another question I have is this: I just read somewhere that some lenders require down payment funds to be in the account for 2 months. This REALLY throws me for a loop since I'm waiting for my tax return and I'm using that for my down payment.
Funds have to be in the account for 2 months in order to be "seasoned", in which case, they do not have to be sourced. If the funds are in the account for less than two months, there isn't a problem per se, the funds then just need to be sourced, which means you have to show where they came from. I don't think you'll have any issue. They'll see that it was a tax refund and that the money belongs to you. They want to make sure you're not taking a loan from someone that you would have to pay back.
Starting Score: ~500 (12/01/2008)