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How rapid rescoring works to improve a credit score

By

Let's Talk Credit
Let's Talk Credit columnist Jane E. McNamara
Jane E. McNamara is president and chief executive officer of GreenPath Debt Solutions, a nationwide, not-for-profit, providing financial literacy through consumer education and counseling for more than 50 years. For financial literacy tips and assistance visit GreenPath on Facebook or YouTube.
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Question for the CreditCards.com expert Dear Let's Talk Credit,
How much do you pay and to whom do you pay it to boost your credit quickly through a rapid rescore? -- Nekitia

Answer for the CreditCards.com expert Dear Nekitia:
A rapid rescore can only be requested by a mortgage lender. Typically, it may be requested if, for example, you are a few points away from a credit score that would mean a lower interest rate. The rapid rescore will only improve your credit score if you have errors on your credit report. Accurate information cannot be removed from a credit report in a rapid rescore.

Here's how it works. You may have an error on your credit report, such as a negative account that doesn't belong to you, or an account where a payment was not reported correctly. This information is lowering your credit score by the crucial points that make a huge difference in the mortgage loan for which you would qualify. In such a case, you would provide the lender with proof against the error and the lender would submit the information to the credit bureau. Or, you could have a high balance on an account that you paid down, but that has not yet been reported on your credit report, and the lender would send in proof of the payment to the bureaus.

Rather than having to wait the customary 30 days to have a dispute resolved for incorrect information, or to have a payment posted by the creditor on the normal posting schedule, the rapid rescore allows the report to be corrected/updated and a new score calculated in approximately 72 hours. Your lender can use a simulator to determine if the corrected information on your credit report will improve your score enough to make a difference.

The credit bureaus offer rapid rescoring to their customers (mortgage lenders) and charge a nominal fee for the service. Many lenders absorb the fee and some pass it along to consumers.

Rapid rescoring should not be confused with credit repair. Some companies offer services to dispute information on your credit reports and “repair” your credit. Sometimes, the fees charged for these services can be high and the service provided is something consumers can accomplish on their own. If you are trying to improve your credit, know that accurate negative information cannot be removed from your credit report. It will come off your report seven years from the date of delinquency.

If you are hoping to qualify for a mortgage loan, get copies of your credit reports from AnnualCreditReport.com at least six months before you want to qualify for a loan. This should give you the time you need to get your credit reports in the best shape to qualify for a mortgage and you wouldn't need a rapid rescore.

Let's keep talking!

See related: A rapid rescore can fix your credit score in a hurry

Meet CreditCards.com's reader Q&A experts
Vexed by a personal finance problem? CreditCards.com's Q&A experts answer questions from readers every weekday. Ask a question, or click on any expert to see their previous answers.
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Barry Paperno, Speaking of Credit columnist Barry Paperno,
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Elaine Pofeldt, Your Business Credit columnist Elaine Pofeldt,
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Erica Sandberg, Opening Credits columnist Erica Sandberg,
"Opening Credits"

Published: February 13, 2014



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