- November 30, 2017
- Posted by: Joel Firestone (G-Net Consulting)
- Category: News
A “Rescore” is the updating of information on a credit report at the bureau level in an expedited manner. It is not credit repair and it is not a manipulation of the credit report. Eventually the changes that are made through a rescore would be reported at the bureau level by the creditor. A rescore is simply getting the information to the credit bureaus in a more rapid manner than it would by being reported on its own.
There are several reasons a lender might choose to do a Rapid Rescore for a borrower. Helping to raise their credit scores would be the first. They are also done to remove dispute remarks or to show balances paid off for Debt to Income (DTI) ratio purposes.
The highest percentage of what are done through a Rapid Rescore is to show revolving balances paid down. This is normally where a borrower can get the biggest credit score boost. Showing installment loans paid down or paid off normally does not help improve a credit score, the greatest change comes with revolving balances. Other possibilities for improving a credit score through a Rescore would be having late payments removed or collection accounts deleted. In order to do the latter, two of the creditors that are reporting on the credit report must first agree to remove any late payments or delete the collection. The borrower will then need to obtain letters from those creditors stating such. Eventually those corrections will be reported by the creditors to the bureaus but this can take a while. At this point, if time is an issue, the borrower may choose to go to their lender and have them order a Rescore to expedite the reporting of the corrections.
Rescoring a credit file is not something a borrower can do on their own. They must go through their mortgage broker to do this. Third party credit reporting agencies do not have the ability to work directly with borrowers as that is in violation of their contracts with the three credit bureaus. The cost of the rescore also cannot be passed on to the borrower. The credit bureaus consider a Rescore to be an expedited dispute process. And charging the borrower they feel to be a violation of FCRA section 611 which states that a borrower can dispute items on their credit report free of charge. The Rescore cost is for the expedition of the correction.
While rescoring is a valid service and does yield a very high success rate, there is never a guarantee that the results will come out as hoped. There are too many variables when it comes to credit reports. For example let’s say a rescore was done to show a balance on a credit card paid down and the hope was to get the borrower’s mid score over 680. When a rescore is complete the entire report must be re-pulled. Just a single account cannot be re-pulled by itself. So there is always the chance that something else could have reported on it’s own during the time that the rescore was in process that could prevent the credit scores from improving. It could be anything from a new late payment showing up, a new account being reported or a balance on another credit card going up. All of these things could prevent the scores from doing what was hoped would happen by paying down the original credit card.
There are certainly several benefits for utilizing the Rescore process. It’s not however for everyone. If a borrower has time they can simply wait for the creditor to update the information on their own, but for those under a time crunch it can be a very valuable and credible tool.