Mortgage Brokers

Credit Report Errors Can Derail a Mortgage Deal - Here’s How You Can Help

As a mortgage broker, you’re the bridge between a hopeful homebuyer and the financing they need. You guide them through one of the most complex, high-stakes financial decisions of their lives. But what happens when a deal falls apart–not because of their creditworthiness, but because of a credit report error or a false deceased notation?

This isn’t as rare as you’d hope. And if your team isn’t trained to spot it or doesn’t know where to refer clients, you risk losing qualified borrowers, damaging relationships, and wasting valuable time.

Let’s break down what’s going wrong, why it matters, and how you can help – without taking on the burden yourself.

The Problem: Inaccurate Credit Reports Are Blocking Approvals

According to the Federal Trade Commission, 1 in 5 consumers has an error in their credit report. These mistakes aren’t limited to minor inaccuracies – they often include:

• Accounts that don’t belong to your client (mixed files)
• Late payments on accounts that are not accurate 
• Charged-off accounts that were paid or discharged in bankruptcy
• Duplicate reporting of debts
• Accounts reopened after settlement.
• False “Deceased” status reported by credit bureaus or furnishers

These issues can instantly drop a credit score below the required minimum or result in an “indeterminate” status that makes underwriting impossible.

When the error is severe – such as being falsely reported as deceased – the borrower is essentially locked out of the financial system. No credit score. No DU approval. No chance to move forward.

How These Errors Affect You

You’re on the front lines. When something in the report doesn’t make sense, the client turns to you – not the bureaus – for answers. And the impact on your business is real:

1. Lost Revenue

   Every lead costs you time, effort, and often money to acquire. Once you have their interest, you spend time generating documents, pricing loans, gathering documentation – only to have the deal collapse because of a fixable reporting error. That’s time you don’t get back, and revenue that never closes.

2. Client Frustration

   If a borrower discovers their deal failed due to bad data – and no one helped them – they’re unlikely to return. Worse, they might blame your process or go to another lender who can “magically” solve the issue.

3. Pipeline Disruption

   File delays caused by credit disputes can slow your pipeline, shift timelines, and require unnecessary LOEs or manual underwriting.

4. Reputational Risk

   You build trust by delivering clear answers and viable solutions. Losing a deal to a system error – without guiding the client – can hurt your reputation.

What You’re Allowed (and Expected) to Do

While resolving credit issues isn’t your responsibility, pointing clients in the right direction is part of effective client support. If credit is affecting their eligibility, you should help them understand:

• What’s on their report;
• What looks suspicious;
• That they have a right to dispute errors;
• Where to go for legal support if needed.

Under the Fair Credit Reporting Act (FCRA), your client has the right to:

• Receive a copy of their credit report;
• Be informed if information in that report contributed to their loan being denied or downgraded;
• Dispute any inaccurate information, including the deceased status.

You’re not their attorney, but you are their advocate. Pointing them toward the right resources is part of that role.

How to Spot Red Flags

If something doesn’t add up, look for these common signs of serious credit report issues:

• A borrower with steady income and low debt shows a surprisingly low credit score;
• A report shows derogatory accounts in regions where the borrower never lived;
• A client is marked “deceased” and can’t generate a credit score;
• The report includes accounts that they swear were settled or discharged years ago;
• Trade lines show duplicate entries or repeated negative events.

Ask a few clarifying questions. If there’s a chance of error, they need a path to challenge it–fast.

Where to Send Them: Legal Support for Credit and Deceased Notation Errors

At Consumer Attorneys PLLC, we work with borrowers across the country to investigate and correct serious credit reporting issues – including:

• Mixed files (someone else’s data in their report);
• Inaccurate payment history, statuses, and balances;
• Discharged or settled debts are still showing as open;
• False deceased notations;
• Duplicate or outdated negative reporting.

Our team handles FCRA disputes, furnisher communication, and litigation when necessary. The service is no-cost to the client, as legal fees are recoverable from the responsible reporting party if the claim is valid.

Why It Matters for You

Helping a client fix a serious reporting issue can save a deal. But it does more than that:

• ✅ You retain the client for future business;
• ✅ You show value beyond interest rates and lender portals;
• ✅ You move stalled deals forward;
• ✅ You build trust – and referrals – from a client who saw you advocate for them when it mattered.

In most cases, clients have no idea what LexisNexis, Experian, Equifax, or TransUnion are saying about them until it costs them their home loan.

Your referral could change that.

A Quick Referral Guide for Your Team

When you see a credit report with:

• ❌ Data that doesn’t match the borrower’s history;
• ❌ Suspiciously low scores with no clear cause;
• ❌ Notations that say “Deceased” or “Unable to Score”.

Take 3 steps:

1. Flag it: Let the client know that something in the report may be wrong.
2. Explain it: Tell them they have legal rights to dispute inaccurate credit info.
3. Refer them: Get a referral link below and guide your client to us for professional help.

You’re not fixing the error – you’re helping the borrower keep the loan alive.

Final Thought: Don’t Let Bad Data Kill a Good Loan

When a borrower gets denied something as important as a mortgage, their future family home, due to inaccurate credit reporting, it feels like the system is working against them. Sometimes, it is. And if you don’t help them navigate it, they won’t just lose the loan–they’ll lose trust in you.

You don’t have to solve the problem. You just have to know where to send them.
Legal support for borrowers dealing with inaccurate credit reports and false deceased notations.