Finally, after all that looking you’ve found the perfect home and are ready to make an offer. Everything is in order – but one thing. You discover that your credit report contains incorrect information; errors that have negatively impacted your score to such an extent that it is too low to qualify for an ideal mortgage. Is there anything you can do to bring your score up to where it should be quickly? Yes. It’s called rapid rescoring.
What it is
Rapid rescoring is a fee-based service that is offered by many lenders to help their customers accelerate the dispute process. The Fair Credit Reporting Act guarantees a consumer’s right to dispute negative but inaccurate information that appears on a credit report, but clearing up errors can take a long time – in some cases months. If you need loan approval within the week, the normal timeframe won’t help you. In the right circumstances, rapid rescoring can mend your credit report and increase your score within just a few days.
The items that can quickly be corrected or removed include debts that should have dropped off the report because they were too old, accounts that aren’t yours, and incorrect balances. Rapid rescoring can even help if you have an accurate debt that you can pay off immediately, since these companies can have that activity reflected on your credit report soon after you make good on it.
Many of the rapid rescoring companies charge about $50 for each account that needs to be addressed. If you are disputing many items, the fee can add up. However, some homebuyers with error-filled reports may find the fee worth paying. To know, compare the cost of the service with the difference in the interest rate you’d be eligible for if you didn’t get your score to where it should be.
What you need to do
Even with the service, you may have to do a little work to speed the process. Some rapid rescoring companies require proof that an error was made – a letter from the creditor indicating that you did pay on time rather than late, for example. To obtain the documentation, contact the creditor, provide your own proof that the information is incorrect, and ask that they send you a written statement with the accurate information. If you don’t have or can’t get the creditor’s letter, some services will do it for you, but it will probably cause a delay – something you are trying to avoid in the first place.
Because true rapid rescoring is only available through a lender or broker, beware companies that market directly to consumers – they are probably scams. Rapid rescoring is never to be used to dispute information that is negative but correct, and any company that promises to so is almost certainly not legitimate.
While rapid rescoring can be helpful, you can avoid the anxiety and expense by monitoring your credit report on a regular basis. If you are in the market for a mortgage, make sure you pull copies of your credit report from each of the three major credit bureaus (TransUnion, Equifax, and Experian) at least six months before you are ready to buy, and clear up any discrepancies long in advance – for free.