|
By Charles Essmeier
Most consumers are aware that a history of paying bills late or not at all can
hurt one’s ability to obtain a loan. All financial transactions are recorded
by three credit bureaus and offered to lenders upon request in the form of a
credit report. That report contains the all-important credit score, which
determines whether or not the borrower is a good risk for a loan. If you have
a poor payment history, you could be out of luck when you try to obtain a
loan. The same applies if there are errors on your credit report that suggest
that you may pose a greater risk to the lender than you really do.
Traditionally, it has taken months to straighten out problems on a credit
report, and borrowers who are eager to close on a mortgage or home equity
loan may not have months to wait. What can be done? A relatively new mortgage-
related product known as rapid rescoring can, in some instances, fix problems
on a credit report in as little as three days.
We have covered the topic of credit repair in previous articles. The notion
that there are companies that can fix bad credit reports is a myth. If you
have a history of not paying your bills, no company you can hire can make
that particular problem go away. The only way to fix that is to become
responsible, pay your bills and retire your credit card balances. On the
other hand, if you find yourself ready to buy a home and suddenly discover
that there is an error on your credit report that will impair your ability to
qualify for a loan or your ability to obtain a good interest rate, there may
be a solution. Companies that specialize in rapid rescoring work with both
lenders and the credit bureaus to expedite the process of removing errors
from a credit report. It’s not magic; you will need to provide written proof
that the error is legitimate, but once you submit it to your lender, they can
pass it on to the rescoring company, who will handle the rest of the
transaction. The process is often completed in three business days, although
it can sometimes take as long as two weeks. Still, that’s a tremendous
improvement over the one to three months it may have taken in the past.
Rapid rescoring has turned out to be a lucrative business for the companies
that specialize in it, and lenders love it because it helps more buyers
qualify for loans. While it is a nice service to have available, most
consumers would be better off preventing such errors in the first place. The
best way to do that is to regularly check your credit report for errors and
keep it up to date. You can obtain a copy for free from the free credit
report (http://www.annualcreditreport.com/>) Website. In a pinch, however,
rapid rescoring has been a tremendous last-minute tool for saving borrowers
from being turned away from the house of their dreams.
©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro
Marketing, a firm devoted to informational Websites, including End-Your-Debt.
com, a Website devoted to debt consolidation and credit counseling (http://
www.end-your-debt.com/>debt) information and HomeEquityHelp.net, a site
devoted to information on mortgages and home equity loans. (http://www.
homeequityhelp.net/>)
|
