A few credit score points can mean the difference between a good mortgage rate, a lousy one or getting a loan at all. In the current state of matters, letting a loan “die on the vine” is not acceptable. You must explore every avenue possible to drive that loan to the closing table. While time is of the essence, you also know that dealing with less than reputable “credit repair” companies is not the direction you want to take.
The Expedited Rescore Program, a practice employed by mortgage lenders and brokers to help lift clients' scores to qualify for better loans, allows borrowers to get accurate information updated into credit files within a few days, rather than waiting weeks or months for the credit bureaus to do it on their own.
That faster timetable could save thousands of dollars on the mortgage loan for borrowers, and increase loan closing ratios. In the current mortgage market, raising someone's middle FICO score from 699 to 720, for example, will save thousands of dollars over the course of the loan. Residential mortgage practices include frequent use of rescores for borrowers. The cost is minimal, the improvement in mortgage pricing is very significant, and the timeframe is minimal.
When you're in a tight lending environment, every single point counts. That's especially true, if you have a first time homeowner with a middle-of-the-road credit score, ready to buy, and wanting to take advantage of today's record-low interest rates.
What is the Expedited Rescore Program?
In short, the Expedited Rescore Program is a faster updating of the credit file. For example, if you pull your credit reports and see that there are legitimate errors on them that are pulling down your credit score, a rapid rescore can help you get those errors corrected much faster than if you tried to dispute them yourself.
It will correct incorrect information at the bureau level. With the proper documentation, the correct information will be sent to the bureaus. The bureaus will verify the document and update the account. The update will take about 2-3 business days after being submitted to the bureaus. (Vs. the 2-3 months it usually takes) if the borrower disputes the information themselves.
While this process is considered a permanent update at the bureau level, it is up to the creditor to change their reporting to the bureaus. We have no control over this. If they do not change their reporting, it is possible that the next time they report, they will report the old, incorrect information. Scores and information on a report can change daily, so we recommend having the underwriter pull their report as soon as possible after the update is complete.
Why Should I Use the Expedited Rescore Program?
Around 80% of repository credit files contain incorrect data. This usually negatively impacts the FICO score. Sure, you can have the consumer write to the three bureaus and submit a dispute. But this process will take at least 30 days for anything to show up on the credit report.
By utilizing an Expedited Rescore Program program you are able to quickly get the most updated information on the credit report so you can close more mortgage loans faster and easier.
Who pays for the Expedited Rescore Program?
The Expedited Rescore program is paid for by the mortgage institution, and the CRA (credit reporting agency) will bill their client (the mortgage institution) for the service. This is not a service that can be used directly with, (or billed directly to) the consumer. Per CRA contracts with the bureaus “The cost of a rescore cannot be passed on to the borrower directly or indirectly.” The bureaus consider this an "expedited dispute process," and, under the Fair Credit Reporting Act, borrowers aren't allowed to be charged for disputing inaccurate information
Acceptable documentation for the Expedited Rescore Program:
1. Letter from a credit grantor authorizing correction to its own trade line. The letter must clearly identify the consumer, the account(s) to be changed, be signed by an authorized representative of the creditor and include the phone number. Letters on company letterhead from the creditor reporting the information with the account number as it appears on the credit file.
2. Universal Data Form signed by the creditor requesting a change to its own trade line. The UDF must clearly identify the consumer, the account(s) to change and include a phone number.
3. Certified Court Document (release of lien, satisfaction of judgment, etc.)
4. If the trade is in bankruptcy, the consumer must provide the discharge letter and the list of creditors showing the specific account on the list.
Unacceptable documentation for the Expedited Rescore Program:
1. Letters not on company letterhead
2. Hand written letters
3. Letters without an account number (as it appears on the credit file)
4. Letters not specific as to what is needed. Ex: If the account needs to show as "paid in full" then the documentation must state "paid in full"
5. Copies of paid receipts, western unions, cancelled checks, bank statements, computer print outs, bills or pay history print outs
Note: Mixed Files can be processed with Experian for a flat rate. Please contact Data Facts for more details.
The Expedited Rescore Program is not credit repair
Proponents of the Expedited Rescore Program are quick to point out that it's not a form of credit repair -- an industry whose bad apples promise, illegally, to erase accurate negative information from consumers' credit reports. Rapid rescoring is simply updating and correcting legitimate disputed information with the proper backing documentation and should only be done through a mortgage broker or lender.