You’re credit history and, more importantly, your credit score is one of three main factors in mortgage underwriting (the other two being Loan-To-Value ratio and Debt-To-Income ratio). That’s why it’s important to ensure your credit history and credit score accurately reflect your current situation.
You would be surprised to hear the number of times someone applies for a mortgage, and the credit report comes back with an error or the score is much lower than anticipated.
What is a rapid rescore, and how can it get you a better mortgage rate? A rapid rescore is a process in which your mortgage company can remove errors on your credit report so that your credit score goes higher, and you qualify for a better mortgage rate.
There are two ways to dispute and correct errors on your credit report
- The traditional way
- Rapid Rescore
Some errors are not worth correcting (like a late payment from six years ago), but some are worth correcting, especially if it means a big difference in your mortgage rate and terms. We’ll cover how our Rapid Rescore service can solve your credit issues in days rather than months so that you can obtain the best mortgage rate possible.
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How Long Does A Rapid Rescore Take?
Our Rapid Rescore service will dispute and potentially resolve credit errors or issues within 48 to 72hrs.
The traditional way of disputing items is significantly slower; here are the steps for a traditional dispute:
- Obtain your credit report
- Compose a letter (three of them to each bureau)
- Gather your documentation proving the disputed item is an error
- Mail to the bureaus or dispute online
- Wait for 30 to 60 days
- Try again because a lot of the time, it doesn’t work
With Rapid Rescore for a mortgage application, you can toss out the traditional way provided you have proof the item(s) you are disputing is an error. If you have proof, supply that to us, and we’ll take care of the rest. This is what we do on our end:
- Contact our credit provider
- Complete the necessary documentation
- We pay for the service
- Submit our official request
- The decision is back within 48-72 hours
Keep in mind there are no guarantees that the outcome will net the results you are looking for, but a Rapid Rescore is usually successful. The best thing for you is that the service is free. However, it’s not free for the mortgage company as the credit provider charges over $100 per disputed item/per bureau.
Since a mortgage company uses your middle credit score, the disputes are usually for just two bureaus so that your middle score is raised.
As an example:
Let’s say your three credit scores are 679 with Experian, 672 with TransUnion, and 669 with Equifax, and we are trying to get the middle score above 680. We would file the dispute(s) with Experian And TransUnion in hopes those two credit scores would move above 680 so that the client could lock in a better interest rate.
What Credit Report Errors Can I Dispute?
You can dispute just about anything on the report as long as you have proof (see below for what we need) it is an error. However, for the purpose of obtaining a lower mortgage rate, we focus on these areas:
- Derogatory items like missed payments, collections, and public records such as liens
- Credit card balances
So let’s say your credit report says you were late 18 months ago on your car payment, but you have a letter from the lender saying they made a mistake (or you can get a letter).
Or maybe you have a medical collection account listed on your report that’s showing open with a balance due, but you settled it years ago and owed nothing.
One of the easiest ways to improve your credit score with our Rapid Rescore service is to update your credit card balance. Most people don’t know this, but even if you still pay off your credit card every month, they will still report a balance due if you wait until you receive your bill to pay that balance in full.
If you have a credit line of $5,000 on a credit card and you receive a bill showing a balance of $4,600, that is what’s being reported, even if you send in full payment. And when it’s reported you maxed your credit card, that’s a big negative on your credit score.
The key is to pay that $4,600 off BEFORE the bill cycles so that when you receive the monthly bill, it will be zero or a very small amount, which will be reported to the bureaus. If your credit cards are maxed out, and you can pay them down immediately, then a Rapid Rescore might be for you.
Documents You Can Provide To Prove Your Case
The documentation you provide is the key to success when doing a Rapid Rescore. If you are disputing an error like a missed payment, you need a letter from the creditor stating that the late payment was an error. Please know that they verify such information, so sending accurate documentation is essential.
If we are looking to dispute your current balance so that your credit card (or cards) are not maxed out, then you’ll need the transaction history from online showing your name, four digits of your account number, the URL, and the date along with the current balance.
Does Rapid Rescore Work?
Absolutely and I would say the success rate is much higher than if you were to mail or dispute the item directly with the bureau. As mentioned, documentation is key, and without it, a Rapid Rescore will not work.
I have personally seen a Rapid Rescore improve someone’s credit score enough so that we were able to go from not doing a loan to full loan approval. 20 – 60 point jumps in your credit score are not uncommon, and if the disputed item is significant, then your credit score jump could be much higher than that.
The better credit score allowed the borrower to lock in a better mortgage rate.
I Need To Do A Rapid Rescore; What’s Next?
The first step is to review your credit report with an experienced Loan Officer (like me!). Someone who has done this before and has at least five years of experience as an MLO (Mortgage Loan Originator). The Loan Officer will be able to explain what can/should be disputed and what is needed for that dispute to be successful.
Once you and your Loan Officer have discussed how to proceed, the next step is to provide your documentation so the Loan Officer can file the claim with the credit report provider.
After that, it’s just a waiting game, and you should hear back within 72 hours of the claim being filed. It’s important to remember this; if you are disputing balances, you must remember not to use those credit cards until after your Loan Officer says it’s ok (after the 72-hour waiting period.