Sometimes, credit reports contain errors serious enough to cause consumers to be denied credit, a loan, an apartment or home loan or even a job. Fortunately, the Fair Credit Reporting Act (FCRA) gives consumers the right to request that legitimate credit reporting errors are corrected. Unfortunately, many consumers, particularly those trying to close on a mortgage loan, may not have the time it takes to make the change.
If you find yourself in this predicament, a relatively unknown service, called rapid rescoring, can significantly speed up the dispute process — legitimately. With the help of a mortgage lender or broker, consumers can get their reports corrected and rescored in a matter of days, rather than the typical one to three months.
Rapid rescoring is somewhat costly — averaging $50 for every account that needs to be addressed. However, improving your credit standing through rapid rescoring can make the difference between qualifying for a home or not. It can also help consumers to obtain better loan terms, possibly saving thousands of dollars over the life of a mortgage loan. If you’re interested in rapid rescoring, here’s what you need to know:
- You must work with a mortgage broker or lender. Rapid rescoring is not available to consumers.
- In addition to reviewing your report for inaccurate negative information, also look for omissions. A study by the Consumer Federation of America and NCRA found that 78 percent of all files were missing at least one revolving credit account in good standing.
- Do not waste your money trying to remove accurate negative entries from your report. No one can legally remove accurate information from your credit file.
- Locate proof that the item is an error. If you are not able to provide documentation that the item is incorrect, rapid rescoring may not be helpful.
- Realize that this is not a sure thing. Your credit score is determined by a complex formula. One change may or may not make a significant difference to lenders.
Finally, to avoid a time-crunch, vow to check your credit reports at least once each year and before making any major purchase. To obtain your credit reports, visit www.AnnualCreditReport.com.