In the past I have written how Disputing your Credit Accounts can get your mortgage denied. Since that time the lenders and government have come out with specific rules on Disputed accounts. You still do not want to dispute your accounts. The reason why disputed accounts is a problem, is because when you dispute an account it takes it out of you credit score. So you could dispute a bunch of bad accounts and your credit score would increase. But mortgage underwriters know this is a just a form of "cheating" to get a higher credit score. And this is why you will not want to dispute your credit accounts, because your loan could get denied because of the disputes. Below is the information you need to know on disputed accounts and based on which loan you are trying to get:
Conventional Loans- You can not have a disputed accounts. In Theory you can have one disputed account if you get a LP approval, but see below.
FHA, VA, USDA and LP- 1. If the disputed account has a $0 balance that is okay and the dispute does not need to be removed. 2. If the account is 2yrs old or more and the balance is under $500 you do not need to remove the dispute. But, the date used to see if the account is over 2yrs old is the most recent date of the account. So if the account is 5yrs old but the reporting date of the account is under 2yrs old you have a problem. 3. Any account that has not fit the two above examples, must have the dispute removed.
Long Story Short, DO NOT Dispute your Accounts if you are looking to get a mortgage. Also, be aware of "Credit Repair" companies that say they will dispute your accounts for you and increase your scores. You will still need to get the disputes removed. I recently had a client that the credit repair company disputed 8 accounts and it cost her $1000 to get the disputes removed quickly for her mortgage. For directions on how to get your disputes removed from your accounts yourself, Removing Disputed Accounts. Please contact me with any questions. These rules are Specific to HUD rules and may differ per your lender.