If you need to fix your credit quickly, you may be sorely disappointed with the standard credit reporting process. Yes, you can dispute issues on your credit report and get them fixed, but it’s not going to happen in a short amount of time.
With rapid rescoring, though, you could see a change in your score in a matter of a few days. Just what is rapid rescoring and how does it work? Keep reading to find out.
What is Rapid Rescoring?
Rapid rescoring is a third party business that your home loan lender may use. As the name suggests, your credit score can be rapidly changed with the right information. For example, if you paid off your credit card today but your credit card company won’t report it to the credit bureau for another month, your credit score will not increase any time soon. If your lender utilizes rapid rescoring, though, you could have it changed in a day or two.
How Can Rapid Rescoring Help You?
Rapid rescoring helps borrowers that have a low credit score, but that have the means to improve it quickly. Below are a few examples:
- You are overextended on your credit card debt – If you have the cash available to pay your debts down right now, you can do so and have your credit report resubmitted for rapid rescoring. The lower credit utilization rate should help your credit score increase now rather than when the credit card companies send the information for batch processing.
- You have late payments on your credit report – Again, if you have the cash available to bring your accounts current, you can do so now and submit the proof to your lender. The lender can then send your report for rapid rescoring to see how the current payments affect your credit report.
- You have a mistake on your credit report – Typically, credit bureaus take 30 – 60 days to fix errors on your credit report. If you don’t have that kind of time and you have the proof that there is an error, your lender can submit the information for you and get your credit score rapidly rescored.
Can Rapid Rescoring Hurt You?
Rapid rescoring works on the information that you provide. They rely on the fact that the information you provide is honest too. If you tell a lender you are current on a loan, but you really aren’t, rapid rescoring won’t help you get that approval or lower interest rate you were trying to get. It only works if the information that you provide is 100% truthful.
In some cases, rapid rescoring can make your credit score decrease. Make sure you talk to your lender before you make any changes to your credit to see what type of effect the changes will have. For example, if you paid your credit card debt off, but you have a large amount of installment debt, it could negatively affect your credit score. The balance of the type of debt that you have plays a role in your credit score. Having a lot of debt of one type and none of another can knock your credit score down.
Things You Should Know About Rapid Rescoring
There are a few things you should understand about rapid rescoring:
- It shouldn’t cost you any money. Lenders should offer it free of charge, if they decide to offer it at all.
- It may not work. There is no guarantee that your credit score will increase. Make sure you give it careful thought before moving forward.
- It can take up to a week to see a change in your credit score. Don’t expect changes overnight.
- It does have the potential to work the other way (decrease your credit score)
Once you are sure you want to take advantage of rapid rescoring, you’ll need to find a lender that offers it. Some lenders don’t want to mess with it and would rather use the credit score provided by the credit bureau at the time of your application. As always, shop around for different lenders that meet your criteria, and in this case, use rapid rescoring.