Rapid Rescoring Credit Report

Improving your credit score usually works out for the best if you do it yourself. When it comes to the potentially powerful ‘rapid rescoring’, however, it is time to trust to the experts. Rapid rescoring is so new that some mortgage brokers might not be sure how the system works yet, so choose an experienced, well-rounded expert to help you improve your credit with this method.

Rapid rescoring is a method of correcting errors on a credit report from one of the three major credit reporting agencies -- Equifax, TransUnion, or Experian. Ideally, this method quickly improves a credit rating by fixing an error on one’s credit report during a crucial period of time, such as during a home loan application. The result could save you thousands of dollars.

Within this system, errors can be corrected within three days, and almost certainly by five, but for a price (about $200). Less costly challenges to negative items will take at least 30 days, and could even take up to 90 days before an item is cleared at every major credit agency. Especially when you are about to close on a home or consolidate debt into a new loan, it is crucial that false negative items be corrected as soon as possible. It is not uncommon for a rapid rescore to add up to 50 points on a FICO credit score.

Work with your mortgage broker. There are limits on who can help you to get a rapid rescore. If you are applying for a loan from a traditional bank, for example, they may or not be willing to help. Their interest is not necessarily the same as a mortgage broker, who stands to get paid only if you are approved. For this reason, many (but not all) mortgage brokers even may absorb the cost of the rescore. A credit union probably also will be quite motivated to help you improve your credit.

You will have to work to get the job done quickly. Contact the creditor(s) involved as soon as you can to obtain original documentation from them that supports your case in a timely manner. Also make sure that the loan representative, banker or broker with whom you are working is doing his or her homework.

In general, rapid rescoring should be considered if you need your credit score to improve immediately, and if any of the following negatives incorrectly appear on your report:

• A significant error that jeopardizes your chances of getting a loan.
• Incorrectly listed bankruptcy items shown as past due or “uncollectable” rather than as discharged.
• Closed accounts listed as “open”.

Verify that all changes have been made before you request your new credit report.

There is a drawback to rapid rescoring, however. There are instances in which your request might actually create negative feedback and a lower score. Charge-offs from a bankruptcy older than two years, and liens that have been released within the last six months, are two items that should be left unchallenged. This is because correcting some errors actually could lead to the entry of more negative data. Ask a professional about concerns of this nature.

Finally, if you are having difficulty obtaining a loan because of your credit score, it is possible to supplement your existing report without contracting the cost of a rapid rescore. For example, obtain official documents that prove the error regardless or whether or not you order a rescore, because some lenders will consider the documentation in and of itself.

On the other hand, the initial cost of a rapid rescore needs to be considered in comparison with saving interest on a $100,000 loan. If you could obtain a 7% loan without correcting your report, or a 6% loan through rapid rescoring, you will be choosing between a one-time fee for the rescore, and $60 more in payments every month for the next thirty years!

If you need to improve your score quickly in order to obtain a loan or a better rate on a loan, rapid rescoring may be your best bet. It is not for everyone, however, especially if you are in a position to potentially harm your credit further.