Maybe. It depends on the type of account, the balance owed, and the loan program you’re using.

Simply having an account marked as “in dispute” does not automatically prevent you from qualifying for a mortgage. However, lenders must evaluate disputed accounts differently depending on whether they have an outstanding balance and whether the dispute could materially affect your credit profile.

For some loan programs, disputed accounts with no balance generally aren’t a concern. Accounts with balances, however, may need to be reviewed more closely. In certain situations, the lender may require the dispute to be resolved before closing or may need to include the debt when calculating your debt-to-income (DTI) ratio.

It’s also important to know that a disputed account masks the derogatory impact that item has on your credit score. If you have to take it out of dispute, there is a good chance your credit score will go down.

Every situation is unique, and the requirements can vary between Conventional, FHA, VA, and USDA loans. That’s why it’s important not to remove a dispute—or leave one in place—without understanding how it may affect your mortgage approval.

Before taking any action, let us review your credit report. We can determine whether the disputed account is likely to impact your loan and recommend the best path forward.