April 16, 2006

Rapid Rescore

Have you found an error on your credit report?  Perhaps there is some erroneous bad credit that was discovered AFTER applying for your mortgage loan.  Now your Loan Officer is telling you that this bad credit has lowered your credit score and wants you to pay a higher interest rate and come up with a bigger down payment.  You can’t wait the six weeks or so needed to dispute this bad credit with the CRA’s because you have a purchase contract to close in three weeks.  This leaves you with a tough decision: either walk away from the home of your dreams or purchase this property and pay more than you should each and every month.  

Fortunately, you have one other option and that is the Rapid Rescore.  The Rapid Rescore is a premium service that mortgage originators can use to raise your credit score in just three to five days.  Here is how the process works.  First, you must get a signed letter from the creditor (on creditor’s letterhead, within 30 days, including contact name and number, your name and address, and full or partial account number matching bureau entry) stating the specific action the creditor has taken to update your credit file.  Some examples of specific actions may be to change the status of an account from “delinquent” to “current”, to remove a derogatory account entirely, or to update a high credit limit.  Once the credit letter has been telephone verified and forwarded to the CRA, a new credit report is issued with an updated credit score.

Some mortgage companies offer a “what if” scenario for Rapid Rescoring.  Simply put, the account(s) that is to be updated is entered into the “what if” scenario and the new credit score is immediately approximated.  This is not a guarantee of how the Rapid Rescore will ultimately impact the credit score but it is a useful tool and an educated guess.  Other advice would be to examine the significant score factors that are listed on your credit report.  If the account that you are proposing to correct is covered by one of those factors, then it is likely you will benefit from rapid rescoring of that account.

I have looked at countless credit reports for borrowers who have had a previous bankruptcy and more often than not, there are accounts that are not accurately reported.  In such cases, certified (court-stamped) bankruptcy discharge papers including schedules D & F (lists of secured and unsecured claims) can be forwarded to the CRA to evidence that these accounts were included in the bankruptcy filing. 

Remember that the mortgage companies typically are concerned with your middle credit score.  The objective is to move the middle credit score higher.  There is no need to Rapid Rescore your lowest credit score and you will only need to do a Rapid Rescore on the highest credit score if the middle score becomes the highest credit score after a Rapid Rescore.




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