B3-5.2-03: Accuracy of Credit Information in a Credit Report (03/31/2015)

Accuracy of Credit Information in a Credit Report

For all mortgage loans (including DU loan casefiles and manually underwritten loans), the lender is responsible for reviewing the credit report, as well as all credit information, to determine that the credit report meets Fannie Mae's requirements and that the data evaluated by DU was accurate.

If a borrower indicates that any significant information in the credit file is inaccurate—such as reported accounts that do not belong to the borrower or derogatory information that is reported in error—the lender should carefully review the credit information with the borrower, then request the credit reporting company that provided the information to confirm its accuracy.

If the credit reporting company confirms that the disputed information is incorrect or incomplete and underwriting of the application needs to be completed before the credit files can be corrected, the lender cannot use the credit score(s) in the underwriting of the application. Instead, the credit risk assessment must be based on a review of the borrower’s traditional credit history.

For manually underwritten loans, if there are multiple disputed tradelines or a dispute on a mortgage tradeline, the lender should obtain correspondence directly from the borrower indicating the reason for the dispute. The aspect of the tradeline–such as balance, payment history, etc.–that is being disputed is of particular interest when considering the impact to the borrower’s overall credit profile.

Note: If DU does not issue the disputed message, the lender is not required to further investigate.

The lender is responsible for determining whether the borrower’s explanation is reasonable and/or whether additional documentation is necessary to disprove the adverse information (e.g., canceled checks).

See B3-2-09, Erroneous Credit Report Data; B3-2-10, Accuracy of DU Data, DU Tolerances, and Errors in the Credit Report; and B3-5.3-09, DU Credit Report Analysis, for additional information.

Related Announcements

The table below provides references to the Announcements that have been issued that are related to this topic.

Additional Information: https://www.fanniemae.com/content/guide/selling/b3/5.2/03.html