Credit

 There is a lot of confusion about why a lender's credit score is different than credit karma or any other consumer website that offers a credit score. The simple answer is there are different types of credit score models. The consumer websites do not use the same credit scores or credit score models as lenders. It's that easy. However, the data on consumer credit websites are traditionally accurate.  

We are going to define major credit events as Chapter 7 bankruptcy, Chapter 13 Bankruptcy, foreclosure, short sale, or deed-in-lieu of foreclosure, Here are the basic waiting periods before you can qualify for a mortgage.

                                 Foreclosure     Short Sale/Deed In Lieu     Chapter 7 BK     Ch 13 BK

Conventional           7 years             4  years                                4 years                2 years discharge

FHA                          3 years             3 years                                 2 years                1 year

VA                             2 years             Varies                                   2 years                1 year

USDA                       3 years             3 years                                 3 years                1 year

 Collections lower your credit score but they aren't always an issue when obtaining a mortgage.  For example, a medical collection will count against your score but a lender will not typically factor that into your monthly debt. A non-medical collection of course counts against your credit and a lender will typically estimate 5% of the balance as payment and count that against your monthly bills and buying power.  Short answer, lenders typically ask you to pay off collections when they are trying to get your credit score up. If your score is fine they might not ask you to do anything with it. 

Disputing items on your credit report may seem like a good idea but it also tells the lender your current credit score is not accurate because the report is in dispute. Lenders may have an issue with this. If possible you should not have any open or unresolved disputes on your credit when applying for a mortgage. 

Will disputing a credit item hurt my credit score? Here is the simplified answer found on google.  

No, The act of disputing items on your credit report does not hurt your score. However, the outcome of the dispute could cause your score to adjust. If the “negative” item is verified to be correct, your score might take a dip.

This is why disputes are an issue. Lenders want an accurate credit report and credit score.