Your credit score largely determines the rate you will pay for your credit facilities. The lower your credit score, the higher the interest rate you will pay on your credit facilities. Unfortunately, it takes a lot of time for you to see an update on your credit report. Most times, people who intend to get loans but have low credit scores, work at improving their credit scores. Unfortunately, these things to not reflect on the credit report quickly enough. Your credit report is what determines your score and ones the information on the report is not updated, your score will not improve even if you have worked at improving. Sometimes, you can afford to wait until the bureau finally updates the information on your report. Sometimes, lenders have deadlines and if you cannot meet the deadline with the credit score you want, the lender will use the score available.
Fortunately, there is something you can do to ensure that your credit score is updated quickly. This is called rapid Rescoring.
What is Rapid Rescoring
It is a process that lenders use to update your credit report quickly. With this, the update is faster than the normal one. You will not wait for the automatic updates that take time, you will do a manual update with the help of lenders. With this process, when you take positive action towards the improvement of your credit report, the lender will push this information to the credit bureau and then you can request for an updated credit report.
For instance, when you pay off a credit card balance, the lender will push the information to the credit reporting bureau and then you will proceed to request your updated credit report. You cannot do rapid Rescoring on your own. You will need the services of a lender. For instance, you can do this with the help of the mortgage company who will finance your home purchase. Your lender can also determine if rapid Rescoring will help you or not.
What Rapid Rescoring does not Do?
Although rapid rescoring has helped a lot of people to meet the required credit score. However, there are limitations to what rapid rescoring can do.
- Credit repair
Rapid Rescoring does not replace credit repair. It does not dispute the information on the report. It does not help you to negotiate settlement terms with your creditors as well. It only fast tracks the update of your report.
Rapid Rescoring works if the information you provide is accurate. It can also help to quickly remove the wrong information from your report. However, if the information you provide is accurate, it will not work. People think that they can temporarily remove a bad entry even if that information is correct but that is not the case.
It does not improve your credit score massively
If you want to see a dramatic change in your credit report, rapid rescoring is not the way to go. If you rely on rapid rescoring, you will be disappointed. Rapid rescoring can only improve your score by at most 20 points.
How Much Does Rapid Rescoring Cost?
Rapid Rescoring does not cost a fee. Lenders are prohibited from charging a fee for rapid Rescoring under the Fair Credit Reporting Act (FCRA). However, the lender will still benefit in the firm loan fees and interest rates.
What Documentation is Required for Rapid Rescoring?
When you submit do for rapid rescoring, you should note of the following:
All letters must be typed on the creditor’s letterhead.
The letter must clearly indicate how the information should be changed.
The information must also include the date, full account number, the telephone number of the creditor as well as the name of the creditor.
The letter must come from the creditor who is reporting the account.
How Long Does Rapid Rescoring Take?
The time frame for a successful rapid Rescoring varies from one person to the other. It takes time to make payments and for the information to be submitted. Some lenders promise rapid rescoring within a time frame of 2 to 5 days. However, that is not always the case. Some take up to a week. Lenders who have been involved in rapid rescoring will be able to guidance and a timeline.
When Should You Consider Rapid Rescoring?
When you need to get a loan, the lender will charge you an interest rate based on your credit score. If you need a few points to get a credit score for better interest rates or terms, the lender can suggest rapid rescoring. They will help you identify a payment that can raise the required points. Once you do the rescoring, your credit score will increase and then you will be eligible for the lower rate.
This means that rapid rescoring is not for everyone. If you need a lot of points to meet the required credit score, rapid rescoring is not the way to go. It is important that you confirm that a rapid rescore will work for you before you do it. If your lender does not suggest it to you, you can ask them to check for you.
Alternatives for Rapid Rescoring
Since rapid rescoring is not for everyone, you should have other options to try if you realize that rapid rescoring is not working. One of them is to try other lenders. Lenders have varying requirements and the fact that you do not qualify for one does not mean you will not qualify for another. Check the requirements of other lenders, you may qualify for another one.
Another option is to take time and repair your credit before you apply for the mortgage. With this, you will need to put off your plan of applying for credit for at least six months. With credit repair, you will be able to improve your credit score significantly if you are dedicated to doing so.