Credit Repair, Rapid Rescore and Qualifying for a Mortgage
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If you’re worried about whether you can get approved for a mortgage, chances are your credit score is your No. 1 concern.
Depending on how close you are to a qualifying score and how soon you plan on buying a home, there are a few things you can do to improve your score. You might be able to use credit repair services or a rapid rescore to meet those requirements to get approved.
What is credit repair?
The process of credit repair involves taking steps to improve a credit score that may have suffered due to late payments or unresolved errors. You can do credit repair work yourself, or you can hire a credit repair agency to do it for you.
In either case, the process works about the same. After combing over your credit history for errors, either you or an agency will present them along with any supporting evidence to the credit bureaus. If you don’t feel comfortable doing this yourself, or if the idea sounds completely overwhelming, then it might be a good idea to work with an agency.
When working to repair a credit score, it’s important to manage expectations. Not every negative point can be removed from your score — in fact, anything that’s factually accurate won’t be able to be removed at all, not even by an agency. If an agency tells you they can remove something accurate from your score, you should take your business elsewhere since they might be trying to scam you.
Other red flags to look out for when shopping for an agency include being asked for payment upfront (before any work is completed) or being advised to lie on your loan application. Before working with a credit repair agency, make sure they’re legitimate by asking for a written agreement of the services they’ll perform and the total cost. All credit repair agencies must abide by the Credit Repair Organizations Act, which requires them to provide this information upfront.
Credit repair is a good solution for anyone looking to right their credit problems from the past. But in order for it to be fully effective, you’ll also have work to establish and maintain good credit practices. If you’re more interested in obtaining advice on money management than disputing past credit events, you’ll want to hire a credit counseling agency instead.
What is rapid rescore?
Since the improvements from credit repair can take anywhere up to a month or more to reflect in your scores, you might find yourself in need of a faster solution. That’s where rapid rescore comes in.
Rapid rescore is something that can only be done by your lender and is best used in situations where you’re within a few points of a qualifying score. The whole process works similarly to credit repair, except this time the lender pays a fee to the credit reporting agency for them to review and act upon the dispute faster — usually within a 72-hour period.
How to use rapid rescore
The best time to use rapid rescore is when you’re down to the wire in applying for a mortgage and find yourself within only a few points of a qualifying credit score. Keep in mind that just like credit repair, rapid rescore won’t fix everything. Only provable errors (in which you aren’t at fault) can be presented to credit agencies to be fixed. If both you and your lender think you have a valid credit dispute on your hands and are hoping to get it resolved quickly, then rapid rescore might be the perfect solution.
How can credit repair and rapid rescore help me apply for a mortgage?
Credit repair and rapid rescore can help you apply for a mortgage when you have a slightly lower credit score than required. Keep in mind there are many factors that go into mortgage eligibility, and credit score is only one of them.
The bottom line
The method you use to repair your credit score boils down to the specific nature of your credit problems and the time you have available to fix them. If you’re already working with a lender on a mortgage application and have a score relatively close to the one you need, rapid rescore may make the most sense. If, however, you have more time on your hands to improve your credit via credit repair, then you’ll want to decide whether to take on the task yourself or hire an agency to help.