Your credit score is an important factor when not only determining a loan approval but can also affect an interest rate on a particular loan. At the same time, a credit score can be a moving target and do take some explaining to understand how they’re calculated. Further, it’s also no secret that credit scores can be negatively affected due to mistakes found in credit reports.
Three Main Credit Score Sources
There are three main credit repositories, Experian, Equifax and TransUnion. Each uses the very same algorithm when calculating credit scores. A credit score is a three-digit number ranging from 300 to 850 with the higher scores representing a better credit history. When credit scores are reported alongside a credit report, they will be similar but rarely will they be exactly alike. In fact, I don’t think I’ve ever seen credit scores on borrowers be exactly the same. Close, but not the same. For example, scores might come in like 752, 749 and 745. Some consumers first think those scores are averaged together when in fact the middle score is used. In this example, 749 is the qualifying score. Why are they different? Even though the very same algorithm is used to calculate a score based upon the information at the credit bureau, due to reporting times to the agencies businesses that issue credit might report payment histories on different dates. Or, a business uses only one or two credit repositories instead of all three.
Let’s say three reported scores for a loan application are 752, 749 and 380. Where did the 380 come from? Apparently, someone else’s information is showing up on the borrower’s credit report. When people have similar names, unfortunately this isn’t all that uncommon. Now let’s say the scores are 752, 500 and 510. In this example, there’s more than meets the eye. The borrowers review their credit report and immediately see two problems. One, an installment loan they paid off more than a year ago is showing late payments and a current loan. Two, an account listed as theirs is actually not and they have no idea what a recent collection account is doing on their report.
How to fix your Credit Score
In the past, borrowers were tasked with fixing credit reports on their own but this took time. It also meant getting mixed in with the bureaucracy of major credit reporting companies who deal with thousands and thousands of requests each day. But when working with a lender to fix these errors, by providing proper documentation the mistakes can be removed. That’s fine, but what about the scores? The mistake might be taken off the report but the scores represent the information when the report was first requested.
We can Help with Rapid Rescore
Here is where Rapid Rescore comes into play. Instead of waiting 30 or more days to get new scores reported, Rapid Rescore is a service that takes the new information and provides fresh scores to the lender within a day or two. There is a fee for this service, a small one, yet we’re responsible for making the payment, not you. Sound too good to be true? It’s not. Reach out to me. I can help answer any and all questions you may have on this.