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Personal Finance FAQ

Hull Financial Planning Personal Finance FAQ Series: What is Rapid Rescoring and When Should I Use It?

If you’re in the process of applying for a mortgage and find something horrendously wrong with your credit report, then is your mortgage application doomed? No. You can use a process called Rapid Rescoring to correct your credit report.

Take a look at the video below and find out what to do. While you’re at it, you can get my 52 week Financial Game Plan by filling out the box right beneath this.

What is Rapid Rescoring and When Should I Use It?

The transcript follows.

If you’re looking to get a mortgage, then you know that it’s important to check your credit beforehand. Preferably, you’re checking your credit at least six months in advance using http://www.annualcreditreport.com so that you’re able to address any issues that are on your report. However, if, during the course of your mortgage application, you discover issues which can be quickly fixed, then, rather than waiting for the credit agencies to make changes at their glacial pace, you can use rapid rescoring to get a new credit score.

There are three main reasons I can think of to use rapid rescoring:

  1. There is patently incorrect information on your credit report. For example, if your credit report shows a credit card from the First Bank of the Moon and you never opened up a credit card there, that needs to be cleared up.
  2. You’re a victim of identity theft. If someone hacked your identity and opened up a bunch of credit lines and ran them up, then, assuming you have documentation such as a filed police report to show that you didn’t run up those lines, you can have your score adjusted.
  3. You’ve recently paid down a large balance. Let’s say you had a credit card balance of $10,000 and just made an electronic payment to zap that amount. You can show proof of your new $0 balance and get rescored.

It will cost between $25 and $50 for each item, and while most agencies claim that they can get your score changed in 72 hours, the reality is that it may take up to two weeks, so it’s important that you get started right away.

Related items:
What Can I do to Improve My Credit Score?
The Value of Mortgage Shopping
Inflation and the Cost of Your Mortgage

By

Jason Hull, CFP®, was the co-founder of Broadtree Partners, a firm that acquires $1-5MM EBITDA companies. He also was the co-founder of open source search consultancy OpenSource Connections, a premier Solr and ElasticSearch firm. He and his wife FIREd (financial independence retire early) at 46 and 45, respectively. He has a BS from the United States Military Academy at West Point and a MBA from the University of Virginia Darden Graduate School of Business.

You can read more about him in the About Page.

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