I know peak home buying season is winding down, but if you are still in the hunt or you’ve just found that perfect house, knowing about ‘rapid rescore’ could really come in handy and save you a nice chunk of change.
Let’s say you are applying for a mortgage, and when your credit score come back it’s lower than what you and your creditor hoped it would be.
The first thing you need to know is credit scores are not stagnant numbers, they rise and fall as information is updated—sometimes this works to your benefit and other times, not so much.
Shocked by the low score, you look over your credit report and find there is a mistake. It says you are two months delinquent on your student loan—and you don’t even have a student loan. The good news is your credit score should be higher, the bad news is the credit bureaus have 30 days to investigate the dispute. And you’re thinking, 30 days! I need my corrected, higher score now!!
You loan officer also points out that you have a fairly high balance on your credit card. She says if you pay it down to below 30 percent of your credit limit you’ll get another a bump in your credit score. But again, if you make that payment and go through the normal channels, it could take 6-8 weeks before you see the improvement to your score.
Rapid rescoring is a process lenders use to get their borrowers’ accurate information updated into their credit files within a few days, rather than weeks or months. The faster timetable could get you a better interest rate and save you money on fees which could add up to some significant savings.
What rapid rescoring cannot do is repair your credit. So, the two late car payments you made last year will remain on your report—it will not erase negative information if it is accurate.
Would it have been easier to check your credit and correct any errors or pay down your balances months before applying for your mortgage? Probably. But in this fast-paced world where consumers are expecting instantaneous relief from their problems, it’s good that lenders can offer you a quick way to update your files so you can achieve your financial goals now.
A. Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners. Founded in northern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 10 years.