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What Are “Rapid Rescoring” Services & How Can They Help My Credit?
According to the Federal Trade Commission - you see the advertisements in newspapers, on TV, and on the Internet. You hear them on the radio. You get fliers in the mail. You may even get calls from telemarketers offering credit repair services.
Do yourself a favor and save some money, too. Don't believe these promises. Only time, a conscious effort, and a personal debt repayment plan will improve your credit report.
One approach you might consider is using the services of a Rapid Rescorer.
Rapid rescoring services came about because too many people were losing loans or paying too much interest because of credit bureau inaccuracies. Before you get excited, though, you should learn what these services can and can't do:
1. They can't deal with you directly as a consumer - Rapid rescoring is typically offered by small credit reporting agencies, which serve as a kind of middleman between the bureaus and the lending professionals. These agencies, which are often independent but which might be subsidiaries of credit bureaus, provide special services for loan officers and mortgage brokers such as merged or "3-in-l" credit reports. To benefit from rapid rescoring, you need to be working with a loan officer or mortgage broker who subscribes to an agency that offers the service.
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Did you know?
If you need to work on your credit report, the FTC warns that no one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete.
There is no charge for this. Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost. According to the Fair Credit Reporting Act (FCRA).
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2. They can help you only if you have proof, or if proof can be obtained - Rapid rescoring services aren't designed to help people who have yet to start the credit repair process. You need something in writing, such as a letter from the creditor acknowledging that your account was reported as late when you were in fact on time. (This is one of the reasons that it's so important to get everything in writing when you're trying to fix your credit.) If you don't have such proof, but the creditor has acknowledged the error, some rapid rescorers can get the proof for you. However, that might add days or weeks to the process.
3. They can help you get errors fixed, but they can't remove true negative items that are in dispute - Again, you need proof that a mistake was made and not just your say-so. If the credit bureau is already investigating your complaint about an error, the item typically can't be included in a rapid rescoring process.
4. They can't promise to help your score - Sometimes removing negative items can actually hurt a score, strange as that might seem.
The scoring formula tries to compare you to people who have similar credit histories. If you've been lumped into the group with a bankruptcy or other black marks on your report, you might find that your score falls when some of those negative items are removed. Instead of being at the top of the bankrupts' group, in other words, you've dropped to the bottom of the next group - the folks who have better credit. More commonly, removing an error might not help your score as much as you might have hoped and might not win you a better interest rate. There are no guarantees with rapid rescoring.
About the Author: Michael Saunders has an MBA from the Stanford Graduate School of Business. He edits a site on how to Fix Bad Credit and maintains the Handsnet - Economic Security Site.
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