You can file a dispute[0] about items with credit reporting services. The reporter has a time window to reply with supporting evidence. If they don't, you win the dispute by default. If they do, you can dispute it again.
I had a completely BS negative mark on my credit report[1]. I ran that process in a loop (maybe 3-4 iterations IIRC) until the reporter was either bored with it, annoyed by the paperwork, or on vacation until after their deadline. They didn't reply in time and the mistaken mark went away.
You shouldn't abuse that process to get rid of legitimate reports. In the long run it's easier to just pay your bills as best you can. But the credit reporters have all kinds of processes they can use to ruin your day. You absolutely should use the processes available to you to make sure your report's accurate.
[1] In before "you must've done something wrong!" Nope. A large government agency claimed I owed them money. I had all of the receipts showing that I paid in full. I eventually had to involve my senator, resulting in an apology letter from a very high ranking official (and I'm sure a few chewed butts). They didn't get around to removing the derogatory report, though, so I did it myself while waiting for the second senator inquiry to wrap up.
You write them a polite and direct letter (or email or webform or...). A couple of things to remember: 1) They literally work for you. You (collectively) elected them, and they get a salary to represent you. That's their job. 2) YMMV, of course, but by and large representatives love helping their constituents. It's the official reason they ran for office in the first place, and a lot of them take that seriously. And cynically, it also looks great come re-election time.
My letter looked like:
"Senator Schmuckatelli:
Please get ${federal_organization} off my back for a debt I already paid to them. # <- "BLUF", or Bottom Line Up Front
${federal_organization} claims that I owe them $X. However, I have receipts proving that I already paid that amount in full. (See enclosures A through J.) They have threatened to garnish my tax returns and wages (encl. K, notice of garnishment), and as a hard-working plebe, I can't afford that. I have written (encl. L through P, copies of my letters) and called them multiple times (encl. Q: call log) multiple times without receiving a reply.
As my senator and beloved Protector Of The Little People, could you please contact them and ask them to stop trying to collect this invalid debt?
Many thanks, and see you at the polls!
- Me"
Tell them at the start of the letter what you'd like them to do. That helps them sort your mail quickly into the right bucket. Then make your case clearly and concisely, including all the evidence you might have. You don't want them to have to look at a wall of text with a phone book's worth of unlabeled paperwork. In short, make it easy for them to help you.
Depends on the debt. If they can be paid off prior to closing, this is not true. If they are a foreclosure or bankruptcy, the waiting period is 3 years assuming extenuating circumstances (Life Happened, not just "I didn't want to pay my mortgage"). Refer to Fannie Mae, Freddie Mac, or FHA underwriting guidelines for specifics (lots of complexity here around non-QM originations, overlays, portfolio loans, etc so the answer will always be "it depends"). FHA is 3.5-10% downpayment required, depending on credit score.
(sources: have been foreclosed on after buying at the peak prior to the Global Financial Crisis, had judgements erroneously on my LexisNexis risk report for over a decade, have family in the mortgage banking industry [specifically mortgage underwriting], did a brief stint as a contract mortgage underwriter in my early 20s, and am very familiar with navigating creditor law but am not an attorney nor your attorney)
That's true in theory, though in practice any house you would actually want to live in is going may have a bunch of buyers competing on it and having an FHA loan (or VA, sadly, or USDA) ensures your bid is in last place. However, there are some conventional lenders that will do 3% if you get approved for PMI.
And yeah, some creditors will do pay-for-delete in which case you may be fine. If you have more than 1 that won't though you may have a hard time, especially if it's not due to medical or something easily justifiable.
> And yeah, some creditors will do pay-for-delete in which case you may be fine.
Pay for delete is paying to have it removed from your credit file by the data provider (either the creditor or their debt collector). This is distinctly different. You pay the debt and provide confirmation the debt was paid. Whether it is still on your credit file is immaterial to close. It's paid? You close.
(the guidelines are what makes the originated mortgages conforming, and able to be bundled for securitization and sold into the bond market; to understand mortgage guidelines is to be able to hack mortgage financing)
> Whether it is still on your credit is immaterial to close.
Not if your score is tanked from having collections on it. Again, there are guidelines, but then there’s the real world. In the real world FHA loans means any desirable house you can’t buy and if you don’t have a decent score you’re not getting PMI.
https://www.consumerfinance.gov/ask-cfpb/what-can-i-do-if-a-... (CFPB: What can I do if a debt collector contacts me about a debt I already paid or don't think I owe?)
https://www.consumerfinance.gov/ask-cfpb/can-a-debt-collecto... (CFPB: Can a debt collector still collect a debt after I’ve disputed it?)
https://www.consumerfinance.gov/ask-cfpb/what-information-do... (CFPB: What information does a debt collector have to give me about a debt they’re trying to collect from me?))
https://www.consumerfinance.gov/consumer-tools/debt-collecti... (CFPB: Debt Collection collection)
Hat tip to metadat for the previous.