East Lansing, MI asked in Banking and Consumer Law for Michigan

Q: Is it illegal to dispute items that are accurate but negative on your credit to qualify for better credit terms?

Is it illegal to get negative items removed from credit and then use that updated credit report to apply for credit?

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1 Lawyer Answer
Brent T. Geers
Brent T. Geers
  • Grand Rapids, MI
  • Licensed in Michigan

A: Not necessarily illegal, and in fact that is or was a commonly-pushed strategy of credit repair shops. When you dispute an item, the credit bureau contacts the creditor for verification. If no verification is received timely, then the credit bureau is supposed to take it off your report. So the strategy was to dispute and hope no verification is received. If verification is received, then of course the entry stays on the record.

Doing so with the intent to immediately apply for credit doesn't work because while items are in dispute, your report will note that, and many creditors will read between the lines what that means.

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